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entitled 'Intercity Passenger Rail: Recording Clearer Reasons for
Awards Decisions Would Improve Otherwise Good Grantmaking Practices'
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United States Government Accountability Office:
GAO:
Report to the Chairman, Committee on Transportation and Infrastructure,
House of Representatives:
Intercity Passenger Rail:
Recording Clearer Reasons for Awards Decisions Would Improve Otherwise
Good Grantmaking Practices:
GAO-11-283:
GAO Highlights:
Highlights of GA0-11-283, a report to the Chairman, Committee on
Transportation and Infrastructure, House of Representatives.
Why GAO Did This Study:
The American Recovery and Reinvestment Act of 2009 (Recovery Act)
appropriated $8 billion for high and conventional speed passenger
rail. The Federal Railroad Administration (FRA), within the Department
of Transportation (the department), was responsible for soliciting
applications, evaluating them to determine program eligibility and
technical merits, and selecting awards, which were announced in
January 2010.
This report examines the extent to which FRA (1) applied its
established criteria to select projects, (2) followed recommended
practices for awarding discretionary grants, and (3) communicated
outcomes to the public, compared with selected other Recovery Act
competitive grant programs. To address these topics GAO reviewed
federal legislation, FRA documents, and guidance for other competitive
grant programs using Recovery Act funds. GAO also analyzed data
resulting from the evaluation and selection process and interviewed a
cross-section of FRA officials and applicants.
What GAO Found:
FRA applied its established criteria during the eligibility and
technical reviews, but GAO could not verify whether it applied its
final selection criteria because the documented rationales for
selecting projects were typically vague. Specifically, FRA used
worksheets and guidebooks that included the criteria outlined in the
funding announcement to aid in assessing the eligibility and technical
merit of applications. FRA also recorded general reasons for selecting
applications and publicly posted broad descriptions of the selected
projects. However, the documented reasons for these selection
decisions were typically vague or restated the criteria listed in the
funding announcement. In addition, there were only general reasons
given for the applications not selected or for adjusting applicants'
requested funding amounts. FRA subsequently provided GAO with more
detailed reasons for several of its selection decisions, but this
information was not included in the department's record of its
decisions. Documentation on the rationales for selection decisions is
a key part of ensuring accountability and is recommended by the
department as well as other federal agencies. Without a detailed
record of selection decisions, FRA leaves itself vulnerable to
criticism over the integrity of those decisions—an important
consideration, given that passenger rail investments have a very
public profile.
FRA also substantially followed recommended practices when awarding
grants, including communicating key information to applicants prior to
the competition, planning for the competition, using a merit review
panel with certain characteristics, assessing whether applicants were
likely to be able to account for grant funds, notifying applicants of
awards decisions, and documenting the rationale for awards decisions
(albeit generally). For example, FRA issued a funding announcement
that communicated key pieces of information, such as eligibility,
technical review, and selection criteria. FRA officials also conducted
extensive outreach to potential applicants, including participating in
biweekly conference calls, providing several public presentations on
the program, and conducting one-on-one site visits with potential
applicants. According to FRA, officials used lessons from a number of
other grant programs when developing its approach to reviewing and
selecting projects.
FRA publicly communicated outcome information similar to other
Recovery Act competitive grant programs we examined, including
projects selected, how much money they were to receive, and a general
description of projects and their intended benefits. Only one of the
programs GAO examined communicated more outcome information on
technical scores and comments; however, this program used a much
different approach to select awards than FRA used to select intercity
passenger rail awards. According to officials, FRA did not disclose
outcome information from the technical reviews because officials were
concerned that releasing reviewers' names and associated scores could
discourage them from participating in future grant application reviews.
What GAO Recommends:
GAO recommends that FRA create additional records to document the
substantive reasons behind award decisions to better ensure
accountability for its use of federal funds. In commenting on a draft
of this report, the department agreed to consider our recommendation.
The department also provided technical comments, which were
incorporated as appropriate.
View [hyperlink, http://www.gao.gov/products/GA0-11-283] or key
components. For more information, contact Susan Fleming at (202) 512-
2834 or flemings@gao.gov.
[End of section]
Contents:
Letter:
Background:
FRA Applied Its Established Criteria to Determine Eligibility and
Assess Technical Merit, but Selection Rationales Were Typically Too
Vague to Assess:
FRA Substantially Met Recommended Practices for Awarding Discretionary
Grants:
FRA Publicly Communicated at Least as Much Outcome Information as
Other Competitively Awarded Recovery Act Grant Programs:
Conclusions:
Recommendation for Executive Action:
Agency Comments:
Appendix I: Extent to Which Recovery Act Projects Align with
Statutory and Other Goals:
Appendix II: Scope and Methodology:
Appendix III: Difference Between the Amounts Requested and
Estimated Awards by State:
Appendix IV: Additional Results from Our Statistical Analysis of
Award Decisions:
Tables:
Table 1: Technical Review Criteria:
Table 2: Selection Criteria:
Table 3: Recommended Practices FRA Followed:
Table 4: Recovery Act Applications Supporting High Speed Rail
Categories by Future Corridor Speed 5 Years After Project Completion:
Table 5: Amounts Awarded, Obligated, and Spent on First Round Track 1
and 2 Recovery Act Projects, as of December 31, 2010:
Table 6: FRA Plan for Obligating and Spending Recovery Act Funds and
Amounts Obligated and Spent, as of December 31, 2010:
Table 7: Guidance and Reports Used To Identify Recommended Government
Practices:
Table 8: Recovery Act Discretionary Grant Programs Reviewed:
Table 9: Difference between the Amounts Requested and Estimated Awards
by State, as of January 2010:
Table 10: Difference between the Amounts Requested and Estimated
Awards by State, as of December 2010:
Table 11: Applications Selected by Technical Review Score, and Odds
and Odds Ratios Derived from Them:
Table 12: Applications Selected by Track, and Odds and Odds Ratios
Derived from Them:
Table 13: Applications Selected by Requested Amount, and Odds and Odds
Ratios Derived from Them:
Table 14: Applications Selected by State and State Group, and Odds and
Odds Ratios Derived from Them:
Table 15: Odds Ratios from Bivariate and Multivariate Logistic
Regression Models by Technical Review Score, Track, Amount Requested,
and State and State Group:
Figures:
Figure 1: Approach that FRA Used to Assess Applications and Select
Recovery Act Recipients:
Figure 2: Differences between Proposed and Requested Award Amounts, in
Percents:
Figure 3: Number of Selected Applications by Technical Review Score:
Figure 4: HSIPR Reported Outcomes Compared to Other Competitively
Awarded Recovery Act Programs:
Abbreviations;
department: Department of Transportation:
FRA: Federal Railroad Administration:
HSIPR: high speed intercity passenger rail:
PRIIA: Passenger Rail Investment and Improvement Act of 2008:
Recovery Act: American Recovery and Reinvestment Act of 2009:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
March 10, 2011:
The Honorable John Mica:
Chairman:
Committee on Transportation and Infrastructure:
House of Representatives:
Dear Mr. Chairman:
A recent influx of federal funds has breathed new life into the
prospect of developing an expanded national passenger rail network in
the United States. Specifically, the American Recovery and
Reinvestment Act of 2009 (Recovery Act) appropriated $8 billion—-
significantly more than Congress provided in recent years-—to develop
high speed and intercity passenger rail service.[Footnote 1] Interest
in these funds was high, and in January 2010 the Federal Railroad
Administration (FRA)-—an agency within the Department of
Transportation (the department)-—selected 62 applications in 23 states
and the District of Columbia to receive the money.[Footnote 2] The
vast majority (almost 90 percent) of the $8 billion awarded went to
develop new or substantially improved passenger rail corridor
projects, which, in several cases, expect to deliver high speed rail
service reaching speeds of more than 150 miles per hour. The remaining
funding generally went to projects focusing on upgrades and
improvements to existing rail service (typically up to 79 miles per
hour).
With the Recovery Act funding, FRA recognized that it needed to
transform itself from essentially a rail safety organization to one
that can make and oversee multibillion dollar investment choices.
[Footnote 3] This report assesses how FRA made the first of those
choices and ensured that national investment goals are being met.
[Footnote 4] It focuses on the extent to which FRA (1) applied its
established criteria to select projects; (2) followed recommended
practices for awarding discretionary grants; and (3) communicated
outcomes to the public, compared with selected other Recovery Act
competitive grant programs. These topics are the main focus of the
report. In addition, we are also reporting on the extent to which
selected projects align with legislative and federal goals. (See
appendix I.)
Our overall approach to addressing these topics was to (1) review
publicly available information, such as federal legislation, plans,
and other guidance, about the high speed intercity passenger rail
program's evaluation, selection and communication approach, and
compare it to practices used by other competitive grant programs; (2)
review documents that FRA used in reviewing applications and selecting
awardees to determine the extent to which FRA applied its established
criteria; (3) analyze FRA data on technical review scores to determine
the statistical relationship between some of FRA's published criteria
and the selection decisions; and (4) interview a cross-section of
officials from 12 of the 40 states and the District of Columbia which
submitted either a preapplication or an application for Recovery Act
funding (selected to reflect a range of application outcomes, award
amounts, number of applications, and geographic location), a random
sample of 18 of the 44 department reviewers which included at least
one person from each applicant review panel, and other FRA officials
who oversaw the evaluation and selected awards.[Footnote 5] We focused
our review on projects selected by FRA in January 2010 and funded
through the Recovery Act, which included applications submitted for
ready-to-go projects (called "track 1a"), the completion of
environmental and preliminary engineering requirements necessary to
prepare projects for future funding (called "track 1b"), and projects
to develop new high speed rail or intercity passenger services or
substantially upgrade existing corridor service (called "track 2").
[Footnote 6] We assessed the reliability of FRA's scoring data by
conducting a series of data tests, reviewing documents and reports
about FRA's data systems, and speaking with officials familiar with
the data. We determined that these data are sufficiently reliable for
our reporting purposes. (Additional information on our scope and
methodology is contained in appendix II.)
We conducted this performance audit from April 2010 to March 2011 in
accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives.
Background:
FRA is the primary federal agency responsible for overseeing safety in
the railroad industry, as well as for distributing federal funds for
intercity passenger rail service. FRA also administers federal
operating and capital grants to the National Railroad Passenger
Corporation (known as Amtrak), which have averaged between $1 billion
and $1.3 billion per year since fiscal year 2003. FRA also approves
Railroad Rehabilitation and Improvement Financing loans and Rail Line
Relocation and Improvement Capital grants, and is the granting agency
for the $120 million in fiscal year 2008 and fiscal year 2009 capital
funds for intercity passenger rail projects.
Recent legislation has vastly increased the federal role in and
federal funds for developing intercity passenger rail service. The
Passenger Rail Investment and Improvement Act of 2008 (PRIEA), enacted
in October 2008, authorized more than $3.7 billion for three different
federal programs for high speed rail, intercity passenger rail, and
congestion reduction grants.[Footnote 7] PRIEA also called for FRA to
create a preliminary national rail plan within 1 year after passage of
the act as well as a long-range national rail plan that promotes an
integrated and efficient national rail system. FRA released a
preliminary national rail plan in October 2009 and a subsequent
progress report in September 2010.[Footnote 8]
The Recovery Act, enacted in February 2009, appropriated $8 billion
for the three PRIIA-established intercity passenger rail programs.
[Footnote 9] Unlike PRIIA, which authorized an 80 percent federal
share for a project's capital costs, the Recovery Act provided up to
100 percent federal funding available for obligation through fiscal
year 2012 and expenditure through fiscal year 2017.[Footnote 10] The
Recovery Act required that the department develop a strategic plan to
use these funds. In April 2009, FRA released its strategic plan for
developing high speed rail in America and distributing federal funds.
[Footnote 11]
PRIIA and the Recovery Act created new responsibilities for FRA to
plan, award, and oversee the use of new federal funds for intercity
passenger rail. In response, FRA launched the high speed intercity
passenger rail (HSIPR) program in June 2009 by issuing a funding
announcement and interim guidance, which outlined the requirements and
procedures for obtaining federal funds.[Footnote 12] FRA further
outlined the vision and goals of the program through a number of
outreach events and meetings, including seven regional workshops and
more than 25 one-on-one site visits and conference calls with
potential state applicants.[Footnote 13] States expressed a great deal
of enthusiasm for the new program, requesting $102 billion across 278
preapplications, which FRA used to gauge initial interest and
anticipate its staffing needs to manage the program. States, including
the District of Columbia, ultimately submitted 229 applications for
$57.8 billion in Recovery Act funds.[Footnote 14]
FRA asked applicants to submit Recovery Act project applications under
three tracks: 1a, 1b, and 2. Track 1 was intended to primarily address
economic recovery goals, and could either focus on ready-to-go
projects (track la) or the completion of environmental and preliminary
engineering requirements necessary to prepare projects for future
funding (track 1b). Track 2 focused on much larger, long-term projects
to develop new high speed rail services or substantially upgrade
existing corridor service. While track 1 and track 2 applications were
submitted and reviewed at different times, FRA used a similar approach
to assess them, and applied the same criteria during three independent
steps: eligibility determination, technical review, and selection.
[Footnote 15] (See figure 1.)
Figure 1: Approach that FRA Used to Assess Applications and Select
Recovery Act Recipients:
[Refer to PDF for image: time line]
June 2009:
FRA launches the HSIPR program.
FRA issues interim guidance and a funding announcement with the
requirements and procedures for obtaining federal funds.
July 2009:
Preapplications deadline.
FRA received 278 preapplications expressing initial interest from 40
states and the District of Columbia totaling $102 billion.
August 2009:
Track 1:
Applications due to FRA.
FRA received 184 applications requesting $6.9 billion.
August-September 2009:
Track 1:
Eligibility determination.
FRA determined 156 applications requesting $3.5 billion were eligible.
September 2009:
Track 1:
Technical review.
Twelve panels, each comprised of three individuals, assessed eligible
applications on six pre-established technical review criteria.
Track 1:
Preliminary selection.
Senior department and FRA officials considered the results of the
technical review as well as four additional pre-established selection
criteria.
October 2009:
Track 2:
Applications due to FRA.
FRA received 45 applications requesting $50.9 billion.
October-November 2009:
Track 2:
Eligibility determination.
FRA determined 23 applications requesting $20.6 billion were eligible.
November-December 2009:
Track 2:
Technical review.
One panel comprised of eight individuals assessed eligible
applications on six pre-established technical review criteria.
December 2009:
Track 2:
Preliminary selection.
Senior department and FRA officials considered the results of the
technical review as well as four additional pre-established selection
criteria.
January 2010:
Track 1 and 2:
Final decisions.
Senior department and FRA officials examined projects from all tracks
and recommended the selection of specific projects. The Secretary of
Transportation concurred with these recommendations.
Track 1 and 2:
Award announcement.
FRA announced the selection of 62 applications from 23 states and the
District of Columbia for the $8 billion in Recovery Act funds.
* Track 1: 48 applications were selected for $0.9 billion.
* Track 2: 14 applications were selected for $7.0 billion.
Source: GAO presentation of FRA data.
[End of figure]
The eligibility determination was conducted by panels of officials
experienced in environmental requirements or passenger and commuter
rail. These officials used worksheets to aid in assessing application
completeness and determining whether applicants and proposed projects
were eligible to receive funds. Eligibility panels also made
preliminary determinations as to whether applicants had substantially
completed environmental requirements and whether the projects they
submitted were ready to begin. For the most part, applications deemed
not yet ready or ineligible were not forwarded for technical review;
because the track 1 eligibility and technical review periods
overlapped, there were two Recovery Act applications that received
technical review scores and were later deemed not yet ready or
ineligible and removed from award consideration.
The technical review was conducted by panels of officials with
experience in several fields, such as passenger and commuter rail,
grants management, and environmental requirements. The technical
review differed slightly for track 1 applications, which were reviewed
by 12 panels composed of three reviewers, and track 2 applications,
which were reviewed by a single panel of eight reviewers. For both
tracks, reviewers used guidebooks to assess applications against six
technical review criteria: (1) transportation benefits, (2) economic
recovery benefits, (3) other public benefits (e.g., environmental
quality and energy efficiency), (4) project management approach, (5)
sustainability of benefits, and (6) timeliness of project completion.
(See table 1.) The guidebooks provided detailed descriptions of what
was included within each of these criterion, as well as step-by-step
instructions on reviewing applications that included a suggested
scoring method using a scale from one (lowest) to five (highest). For
example, the track 2 guidebook suggested applications that included
more than one major weakness, were nonresponsive, or failed to address
a particular criterion be given a technical review score of a one for
that criterion. Applications that technical panelists determined were
responsive, and included major and minor strengths and no major or
very few minor weaknesses in a particular criterion, were to be given
a technical review score of a five for that criterion. After
completing an individual evaluation of each application, reviewers
convened within their panel to discuss their overall thoughts on the
application and technical review scores for each criterion, which they
could revise based on input from other panelists. To arrive at a final
score for each application, FRA officials used a formula that averaged
individual scores and weighted the scores based on established
priorities identified in the funding announcement.[Footnote 16] In
addition, program officials standardized track 1 application scores to
correct for potential inconsistencies across review panels.[Footnote
17]
Table 1: Technical Review Criteria:
Criteria: Transportation benefits;
Types of factors to be considered by reviewers when assessing the
application:
* Supports the development of high speed passenger rail and generates
improvements to intercity passenger rail.
* Reduces congestion across other modes of transportation.
* Encourages integration across other modes of transportation, such as
connections at airports, bus terminals, and subway stations.
* Promotes equipment standardization, signaling, communication, and
power.
* Provides for cost sharing across benefiting rail users, including
freight and commuter railroads, host railroads, and state and local
government.
* Improves the overall safety of the transportation system.
Criteria: Economic recovery benefits;
Types of factors to be considered by reviewers when assessing the
application:
* Promotes business opportunities, including the short- and long-term
creation and preservation of jobs.
* Increases efficiency by promoting technological advances.
* Avoids reduction in the essential services provided by states.
Criteria: Other public benefits;
Types of factors to be considered by reviewers when assessing the
application:
* Contributes to environmental quality and energy efficiency and
reduces dependence on foreign oil.
* Promotes livable communities, including integration with high-
density, livable developments (e.g., central business districts with
access to public transportation, pedestrian, and bicycle networks).
Criteria: Project management approach;
Types of factors to be considered by reviewers when assessing the
application:
* Assesses that the applicant has the financial, legal, and technical
capacity to implement the project.
* Considers the applicant's experience in administering similar grants.
* Examines the soundness of cost methodologies, assumptions, and
estimates.
* Examines whether the application is complete and includes
comprehensive supporting documentation, such as a schedule for project
implementation, a project management plan, agreements with key
partners, an explanation of progress towards completing environmental
requirements, and any completed engineering work.
Criteria: Sustainability of benefits;
Types of factors to be considered by reviewers when assessing the
application:
* Considers the quality of the financial and operating service plans.
* Examines the reasonableness of revenue and operating maintenance
cost forecasts, and estimates for user and nonuser benefits.
* Assesses that funds are available to support operating costs.
* Considers agreements with key partners, such as the proposed
operator and railroads that own pieces of infrastructure necessary to
achieve benefits.
Criteria: Timeliness of project completion;
Types of factors to be considered by reviewers when assessing the
application:
* Assesses whether the project is ready-to-go, will be completed on
time, and will deliver the proposed benefits.
Source: GAO summary of FRA's funding announcement.
[End of table]
After the technical review, senior department and FRA officials—Deputy
Secretary, Under Secretary for Policy, FRA Administrator, and FRA
Deputy Administrator, among others—selected projects to recommend to
the Secretary of Transportation. They considered the technical review
scores along with four additional pre-established selection criteria
identified in the funding announcement: (1) region and location, (2)
innovation, (3) partnerships, and (4) track type and funding round.
(See table 2.) HSIPR program officials gave five briefings to senior
officials on the results of the technical review and possible factors
to consider in making award decisions, such as potential project cost,
service speed, shared benefits, and readiness. Program officials also
provided additional information, including funding scenarios, facts
sheets on individual applications, and corridor maps upon request.
According to FRA, senior officials considered this information when
making their recommendations, but did not numerically score or rank
applications.
Table 2: Selection Criteria:
Criteria: Region and location;
Factors to be considered by senior department and FRA officials when
assessing the application:
* Ensures projects are distributed across the country, in both small
and large population centers.
* Ensures integration and augmentation of projects across the
nationwide transportation network.
* Provides assistance to economically distressed regions.
Criteria: Innovation;
Factors to be considered by senior department and FRA officials when
assessing the application:
* Pursues new technology where the public return on investment is
favorable.
* Promotes domestic manufacturing, supply, and industrial development.
* Develops passenger rail engineering, operating, planning, and
management capacity.
Criteria: Partnerships;
Factors to be considered by senior department and FRA officials when
assessing the application:
* Emphasizes organized partnerships with joint planning and
prioritization of investments when projects span multiple states.
* Encourages creative approaches to workforce diversity and use of
disadvantaged and minority businesses.
Criteria: Track type and funding round;
Factors to be considered by senior department and FRA officials when
assessing the application:
* Preserves funds for track 2 projects, as well as future funding
rounds, if possible.
Source: GAO summary of FRA's funding announcement.
[End of table]
On January 27, 2010, the FRA Administrator recommended 62 applications
for funding and the Secretary of Transportation concurred with these
recommendations. On January 28, 2010, DOT announced the selections.
[Footnote 18] The selections were spread across several types of
intercity passenger rail, including projects for emerging high speed
rail (operating at speeds up to 90 miles per hour), regional corridors
(operating at speeds between 90 and 124 miles per hour), and core
express corridors (operating at speeds between 125 and 250 miles per
hour or more). For example, the department selected one project to
receive $35 million to rehabilitate track and provide service from
Portland to Brunswick, Maine at speeds up to 70 miles per hour.
Another project was to receive more than $50 million to construct 11
miles of dedicated passenger rail track near Rochester, New York,
which will allow for service speeds up to 110 miles per hour. A third
project was selected to receive almost $2.3 billion to initiate the
first part of the California's high speed rail system, which will
allow for more than 200 miles per hour service between Los Angeles,
San Francisco and the Central Valley, and eventually, San Diego. These
selections were consistent with the criteria in PRIIA, the Recovery
Act, and FRA's strategic plan, which included broad goals that gave
FRA discretion in developing a national passenger rail system.
(Additional information on the legislative and program goals, and how
the selected projects fit into them, is contained in appendix I.)
FRA Applied Its Established Criteria to Determine Eligibility and
Assess Technical Merit, but Selection Rationales Were Typically Too
Vague to Assess:
FRA applied its established criteria to determine eligibility and
assess applications' technical merit. However, its rationales for
selecting projects were typically too general to determine how it
applied the additional selection criteria. When asked for more
information on certain applications, FRA provided specific reasons for
its selection decisions, but, in our opinion, creating a detailed,
comprehensive record alongside the final selections is preferable.
Officials reported that they used the technical review scores as a
starting point from which to apply each of the four selection
criteria, which is partially supported by our analysis of FRA data.
For example, we found that applications receiving a higher technical
review score were about seven to eight times more likely to be
selected for an award compared to those receiving a lower technical
review score.
FRA Applied Its Established Criteria to Determine Eligibility and
Assess Technical Merit:
We found that FRA applied eligibility criteria established in its
funding announcement when determining whether applications were
eligible. Specifically, eligibility criteria listed in the funding
announcement aligned with criteria outlined in the worksheets used by
the panelists to verify that applications were eligible. Panelists
were given separate worksheets to conduct the track 1 and track 2
eligibility reviews, and each of these worksheets included eligibility
criteria listed in the funding announcement. For instance, as outlined
in the funding announcement, the track 1 worksheet required
eligibility panelists to indicate if the application was submitted on-
time, by an eligible applicant, and with all of the required
supporting documents. Similarly, the track 2 worksheet included
questions regarding applicant eligibility, qualifications, and
construction grant prerequisites which aligned with the eligibility
criteria listed in the funding announcement.
FRA also applied the established technical review criteria
communicated in its funding announcement by including these criteria
in the guidebooks provided to technical panelists to assess the
technical merits of each application. Specifically, the guidebooks FRA
provided to panelists for reviewing track 1a, 1b, and 2 applications
were divided into six sections that aligned with each of the six
technical review criteria listed in the funding announcement.
Moreover, the criteria within these sections of the guidebook often
matched the criteria in the funding announcement very closely and, in
some cases, word-for-word. For example, the funding announcement
stated that an applicant's experience administering similar projects
would be considered under the technical review criteria of project
management approach, which was included word-for-word in the project
management approach section of the guidebooks.[Footnote 19] We spoke
to at least one representative from each technical review panel; these
representatives confirmed that panelists used the criteria listed in
the guidebooks and did not use other criteria during their evaluation
of individual applications.
Officials Reported Using Technical Review Panel Results and Selection
Criteria to Make Awards Recommendations; Decision Rationales Provided
Little Insight into Selections:
Senior department and FRA officials recommended to the Secretary of
Transportation applications to receive awards and the proposed amounts
of the awards. When deciding which applications to recommend for
awards, senior FRA officials told us that they used the results of the
technical review panels and the four selection criteria. These four
criteria were described in FRA's June 2009 funding announcement as:
(1) region and location (e.g., ensuring geographic balance,
integration into the nationwide transportation network, and assistance
to economically distressed regions), (2) innovation (e.g., pursuing
new technology with a favorable public return, promoting domestic
manufacturing, and developing human capital capacity for sustainable
rail development), (3) partnerships (e.g., multi-state planning and
investment and workforce diversity), and (4) tracks and round timing
(e.g., longer-term track 2 corridor development balanced with ready-to-
go track 1 investments). For example, officials stated that they used
the innovation criterion to select applications with higher proposed
speeds of service. In particular, senior officials reported using this
criterion to reinforce the selection of the California and Florida
intercity passenger rail projects, which were the only eligible
projects with the potential for service above 150 miles per hour. In
another example, officials reported that they applied the partnership
criterion by assessing applicants' track record with implementing
large transportation projects as well as demonstrated relationships
with key stakeholders, such as private railroads.
Senior FRA officials stated they developed their funding amount
recommendations based on their professional judgment and national high
speed intercity passenger rail program goals. Officials told us they
accounted for the risks related to the total cost of the project
during selection discussions and weighed them against the overall
policy goals of developing a national high speed passenger rail
network. Officials also stated that they used their professional
judgment about rail systems to recommend the award amounts for each
application, paying particular attention to the amounts distributed to
the large, track 2 projects, and that they are continuing to assess
the effect of changes to the requested funding amounts during the
scope of work negotiations with awardees.
According to FRA, its rationales for selecting applications are
recorded in a recommendation from the FRA Administrator to the
Secretary of Transportation and in a memorandum from the Secretary to
the Administrator concurring on the recommendations and specifying
potential funding amounts. The rationales stated in these memorandums
were typically vague, such as "aligns well with FRA's published
evaluation criteria" and "will result in significant transportation
benefits [and] preserve and create jobs." These rationales most often
restated the criteria listed in the funding announcement generally
(e.g., result in significant transportation benefits) rather than
providing insight into why the department viewed projects as
meritorious.
In addition, the memorandums did not provide any information on why
other applications were not recommended for selection, which prevents
us from assessing how the department viewed the merits of successful
applications over unsuccessful ones. For example, we found several
instances in which, without documentation, it was difficult to
determine the reasons why some projects were selected and others were
not. Specifically, FRA decided not to select six track 1a applications
from New York that received higher technical review panel scores, and
selected a lower scoring track 1a application from the same applicant.
FRA officials subsequently told us that the lower scoring application
was selected for a number of reasons, including improving the
reliability of the passenger trains on the rail line, ensuring that
the project will become part of the infrastructure of any significant
improvements to passenger rail service west of Albany, and improving
the fluidity of both passenger and freight rail operations on this
heavily used rail route. Similarly, FRA selected a lower scoring track
1a application from Illinois, but not a relatively high scoring one.
FRA officials subsequently told us that they selected this application
because it is an essential part of a long-standing program of projects
to improve the fluidity of rail traffic in the highly congested
Chicago area. FRA officials also told us that the scope of the
relatively high scoring track 1a application was included in Illinois'
selected track 2 application. This level of information, which
provides some insight into the merits of projects, was not included in
the department's record of its decisions.
In addition to the memorandums, FRA posted descriptions on its Web
site of the selected projects, their expected benefits, and
prospective award amounts. However, these descriptions are not
particularly useful in understanding why these projects were selected
because the cited benefits—-such as reducing travel times, increasing
travel speed and ridership, providing attractive transportation
alternatives, and creating jobs—-were supposed to be integral to all
projects. For example, FRA's Web site describes one project as
increasing on-time performance and ultimately allowing speeds of up to
110 miles per hour on its segment, but does not give any indication
why this project was meritorious. Other descriptions were similar.
FRA also sent letters to individual applicants regarding its decision,
and, if the application was not selected, a brief explanation as to
why it was not selected. For example, a number of these letters
explained that applications were not selected because they did not
meet a prerequisite, had application materials that did not provide
sufficient support for the proposed activities, or did not submit all
application materials necessary to adequately evaluate the project.
However, these letters did not provide further details on how the
proposed projects did not meet the prerequisite, how the application
materials were insufficient, or which application materials were not
received. Other decision letters provided applicants with similarly
broad explanations. FRA officials also told us that they called all
applicants, as well as their state secretaries of transportation and
state governors, to inform them of FRA's decisions. Several of the
states that we contacted reported that the primary purpose of these
calls was for FRA to provide feedback on their individual projects
and, when requested, give explanations for why projects were not
selected. While applicants stated that this information will be
helpful during future application rounds, there is no required written
record of these conversations and, therefore, they do not provide
others with insight on why selection decisions were made.
Documentation of agency activities is a key part of accountability for
decisions.[Footnote 20] The department has a financial assistance
guidance manual to assist agencies with administering awards
competitions and which FRA officials told us that they used to develop
the competition framework.[Footnote 21] The manual recommends that all
discretionary project selections, such as the intercity passenger
awards, include an explanation of how the projects were selected based
on the established funding priorities, but does not lay out
expectations for the level of explanation. In particular, the manual
recommends that officials document decisions if projects with the
highest priority are not funded.
While the department documented its decisions, as required by its
financial assistance manual guidance, the absence of an insightful
internal record of the reasons behind award recommendations, and the
final selections where they differ, can give rise to challenges to the
integrity of the decisions made. While FRA was able to provide us with
specific reasons on a case-by-case basis for why projects were
selected, almost a year after these decisions were made, we believe
creating a sufficiently detailed record has increased relevance in
high-stakes, high-profile decisions, such as the intercity passenger
rail awards competition in which there are vocal critics and ardent
supporters of the program.
Similar arguments apply for creating an internal record for amounts
recommended for awards. FRA officials understood that the available
Recovery Act funds were not sufficient to fully fund a number of the
projects and sought to fund projects or portions of projects that
could provide transportation benefits if no additional federal funds
were available. For these decisions, FRA proposed awarding 10 states
(including the District of Columbia) all (100 percent) of the funds
they applied for, 8 states nearly all (91-99 percent) of the funds
they applied for, 5 states some (47-86 percent) of the funds they
applied for, and one state with slightly more (104 percent) than it
applied for.[Footnote 22] (See figure 2. See also app. DI for dollar
amounts associated with figure 2.) The applicant notification letters
did not offer an explanation for why FRA proposed award amounts that
differed from requests, and applicants we spoke with did not report
that FRA had provided such information to them. Given that
infrastructure projects have an inclination for cost growth,
developing a record that explains why the recommended costs are
appropriate for the proposed project provides integrity to the final
decisions.
Figure 2: Differences between Proposed and Requested Award Amounts, in
Percents:
Percent of requested funds proposed for award: 100 or more;
Number of states: 9.
Percent of requested funds proposed for award: 91-99;
Number of states: 10.
Percent of requested funds proposed for award: 47-86;
Number of states: 5.
Source: GAO analysis of FRA data.
[End of figure]
The current economic climate has also increased the importance of
providing an internal rationale for large differences between
requested funds and proposed award amounts. Many states have faced
large budget deficits in 2010 that will require them to make difficult
budget decisions about the future use of state funds, particularly
where the Recovery Act awards will not provide all the funding
expected to be needed to complete a project. For example, as of June
2010, Florida had made $3 billion in budget cuts to close its budget
deficit. For its high speed rail award, Florida is slated to receive
less than half of what it said is needed to complete the proposed
Tampa to Orlando High Speed Rail Express project. An official from the
Florida Department of Transportation is hopeful that Florida will
receive additional federal grants, but is unsure where the remaining
funds will come from otherwise.[Footnote 23] Additionally, Washington
state applied for 16 separate projects totaling $976 million and was
selected to receive a composite award of $590 million. Washington
state officials acknowledged that the award amount will not fund all
16 of the projects, and have since reduced the scope of the
application to the 11 projects that could be completed with the
awarded amount while still providing the maximum benefit to the
corridor.[Footnote 24] FRA officials stated they awarded amounts that
differed from those requested in applications as a result of their
recognition that many of the projects were based on preliminary work
that was not well-refined, and that states differed in their ability
to accurately estimate costs.[Footnote 25] In contrast, North Carolina
received 4 percent more funding than originally requested. According
to FRA, the additional funding was allocated to North Carolina for
possibly adding additional train frequencies for a Recovery Act
project. While we recognize that FRA may have developed these proposed
award amounts for good reasons, without a written record of the
department's rationale for these adjustments, after the fact
reconstructions of funding amount decisions invite outside criticism
of the decisions.
Applications with Higher Technical Review Scores Were Typically Chosen
Over Those with Lower Scores:
One of your interests was in how the results of technical review
panels aligned with final award decisions. As discussed earlier, while
FRA considered the technical review panels to be an important part of
its decision making, they were not the sole basis for selecting
projects. This was detailed in FRA's funding announcement, which
described how applications were first to be assessed against six
technical review criteria and then final recommendations would be made
using the technical review results and four selection criteria.
While the technical review panel evaluations alone were not meant to
designate final selections, we found that of 179 eligible Recovery Act
applications, senior management recommended 92 percent (57 of 62) of
higher scoring applications for funding; that is they received review
panel scores of 3 or higher out of 5 possible points. (See figure 3.)
Within these recommended applications, most received a technical
review score of 3 or 4, and three of the five applications that
received a technical review score of 5 were recommended for selection.
One of the two applications that scored a 5 and was not selected for
funding was included in a selected track 2 application.
Figure 3: Number of Selected Applications by Technical Review Score:
[Refer to PDF for image: stacked vertical bar graph]
Score: 1;
Applications Selected: 0;
Applications Not Selected: 3.
Score: 2;
Applications Selected: 5;
Applications Not Selected: 31.
Score: 3;
Applications Selected: 35;
Applications Not Selected: 48.
Score: 4;
Applications Selected: 19;
Applications Not Selected: 33.
Score: 5;
Applications Selected: 3;
Applications Not Selected: 2.
Source: GAO analysis of FRA data.
[End of figure]
In a few cases though, senior officials recommended applications that
received a lower technical review score (i.e., a score of 2) because,
according to FRA, they believed these projects included freight and
commuter rail service partners that were willing to make cost
contributions in line with their potential benefit share, were
strategically important to other selected applications, or helped to
achieve regional balance. These considerations were included in the
four selection criteria senior department and FRA officials said they
used to evaluate applications. For example, one of the two
applications from Rhode Island requested $1.2 million to complete
preliminary engineering and environmental reviews and received a lower
overall technical review score, in part because technical reviewers
did not believe the applicant had sufficiently quantified the
transportation and economic recovery benefits. This application was
later recommended for selection. According to FRA, senior officials
recommended applications receiving lower technical review scores, such
as this Rhode Island application, in part to achieve greater regional
balance. Additionally, FRA indicated this particular application was
one of the few applications proposed for the Northeast Corridor, which
further supported the region/location selection criteria. In another
instance, senior officials selected a track 2 application from
California that requested $194 million for preliminary engineering and
environmental requirements for a large corridor application that
received a lower technical review panel score. According to FRA,
senior officials recommended some applications receiving lower
technical review scores due to the projects' strategic importance to
other selected applications. Officials stated that they recommended
the track 2 California application because the completion of
preliminary engineering and environmental requirements were necessary
to move forward on several other large California projects also
recommended for an award.
Officials also told us that some applications receiving a higher
technical review score (i.e., 3, 4, or 5) were not selected in order
to ensure regional balance, especially when an applicant had already
been selected for other large awards. For example, a track 1a
application from North Carolina received a higher technical review
panel score due, in part, to the anticipated transportation benefits
of increased ridership and on-time-performance, and the applicant's
estimates that the project would create more than 400 new jobs. Most
of the projects that North Carolina applied for under this application
were also included as part of a larger, intercity passenger rail
application that was later recommended for selection, and the state
was awarded an estimated total of $545 million for high and
conventional speed rail projects. Department and senior FRA officials
reported that higher evaluated applications were not selected if the
proposed project was already included in larger selected projects, to
avoid duplicative selections. Another example was FRA's decision not
to select a higher scoring track 1a application from Florida that
requested $270 million to acquire 61 miles of right-of-way. This
application was scored highly due in part to its immediate benefits
and substantial contribution of state funds but, similar to North
Carolina, Florida had already been awarded $1.25 billion for a
separate large, track 2 corridor project. In addition, almost 90
percent of the applications that scored a 4 and were not selected were
submitted by applicants that had either already received a large award
or had submitted a relatively high number of applications.
To provide further insight into the attributes that were consistent
with being selected for Recovery Act awards, we examined technical
review score and application data using a statistical model and found
that two out of four variables we included in our model, technical
review scores and the number of applications submitted per state, were
significantly related to the likelihood of an application being
selected for an award.[Footnote 26] Applications with higher scores
(i.e., scores of 3, 4, or 5) were about seven to eight times more
likely to be selected than those with scores of 1 or 2. For example,
an application receiving a technical review score of 5, the highest
possible score, was more than nine times more likely to be selected
for an award as an application receiving a technical review score of a
1 or 2. This analysis supports statements from senior department and
FRA officials indicating that the technical review scores were largely
the basis for their selection deliberations.
Additionally, we found that states submitting fewer applications
(i.e., between one and three) were more than three times more likely
to have their application selected than states submitting higher
numbers of applications (i.e., between four and nine). This result
suggests that selection officials attempted to spread the awards
across different applicants, which is consistent with FRA's reported
efforts to attain geographic distribution. However, the results
differed somewhat for the four states that submitted 10 or more
applications. In this case two of the states had a lower likelihood of
being selected for an award than states submitting fewer than 10
applications, while one state had a higher likelihood of being
selected. One additional state had about the same likelihood of being
selected as states submitting between four and nine applications. When
asked about these differences across states, FRA officials said that
the number of applications submitted did not affect their selection
decisions.
FRA Substantially Met Recommended Practices for Awarding Discretionary
Grants:
We identified six recommended practices used across the federal
government to ensure a fair and objective evaluation and selection of
discretionary grant awards. These practices are based on policies and
guidance used by the Office of Management and Budget and other federal
agencies—including the department, and our work.[Footnote 27] FRA
substantially followed these practices, including communicating key
information to applicants, planning for the competition, using a
technical merit review panel with desirable characteristics, assessing
applicants' ability to account for funds, and notifying applicants of
awards decisions. (See table 3.) In our opinion, FRA partially met one
recommended practice: documenting the rationale for funding decisions.
As discussed previously, we believe it would have been beneficial to
provide more detail about the rationales for these decisions.
According to FRA officials, the methods they used to evaluate and
select applications were based on best practices collected from
several other federal government agencies, which we believe likely
helped them meet a number of the recommended practices we identified.
Table 3: Recommended Practices FRA Followed:
Practice: Communicate with potential applicants prior to the
competition;
Attributes of practice: Provide information prior to making award
decisions on available funding, key dates, competition rules (i.e.,
eligibility, technical review, and selection criteria), funding
priorities, types of projects to be funded, outreach efforts to new
applicants and preapplication assistance;
FRA followed? Yes.
Practice: Plan for administering the technical review;
Attributes of practice: Develop a plan for the technical review that
describes the number of panels and reviewers and includes methods for
assigning applications to review panels, identifying reviewers,
recording the results of the technical review, resolving scoring
variances across panels, and overseeing the panel to ensure a
consistent review;
FRA followed? Yes.
Practice: Develop a technical review panel with certain
characteristics;
Attributes of practice: Use a technical review panel consisting of
reviewers who hold relevant expertise, do not have conflicts of
interest, apply the appropriate criteria, and are trained;
FRA followed? Yes.
Practice: Assess applicants' capabilities to account for funds;
Attributes of practice: Assess applicants' abilities to account for
funds by determining if applicants meet eligibility requirements,
checking previous
grant history, assessing financial management systems, and analyzing
project budgets;
FRA followed? Yes.
Practice: Notify applicants of awards decisions;
Attributes of practice: Notify unsuccessful and successful applicants
of selection decisions in writing and provide feedback on applications;
FRA followed? Yes.
Practice: Document rationale for awards decisions;
Attributes of practice: Document the rationale for awards decisions,
including the reasons individual projects were selected or not
selected and how changes made to requested funding amounts may affect
applicants' ability to achieve project goals;
FRA followed? Partially.
Source: GAO analysis of federal agency guidance and the HSIPR
evaluation and selection approach.
[End of table]
* Communicate with potential applicants prior to the competition. FRA
issued a funding announcement that included information on the $8
billion in available funding, key dates, the competition rules, the
funding priorities and relative importance for each one, and the types
of projects FRA would consider for federal grants. Applicants we spoke
with praised FRA's communication and stated that FRA officials did a
good job providing information and answering questions during the
period leading up to the preapplication and application deadlines. For
example, officials from several states indicated that FRA officials
participated in biweekly conference calls, which were helpful in
understanding the technical aspects of how to apply. Applicants also
indicated that the outreach events, particularly the site visits,
helped them refine their applications and ensure projects met program
requirements.
* Plan for administering the technical review. FRA developed two plans
for determining technical merit: (1) the track 1 technical review used
12 panels each comprised of three reviewers and (2) the track 2
technical review used one panel of eight reviewers. Track 1
applications were randomly assigned across the panels, while the track
2 panel reviewed all of the eligible applications. FRA identified and
asked for volunteers to participate in the technical reviews from
within FRA and across several other agencies within the department.
FRA officials also provided reviewers with guidebooks to document
their application assessments and instructed them to input the
results, including scores and comments, into a centralized database.
FRA standardized final track 1 application scores to account for any
unintentional differences in the way panels assessed and scored
applications, but did not need to standardize track 2 scores because
the review was conducted by a single panel. Finally, according to
officials, FRA oversaw the review by examining technical review scores
and comments, and conducting daily meetings with representatives from
each panel to ensure panelists were consistently applying the criteria.
* Develop a technical review panel with certain characteristics. FRA
compiled technical review panels that included staff with background
in several relevant fields, such as grants management, passenger and
commuter rail, and environmental requirements, and made other
knowledgeable staff available if panelists had questions. FRA
officials stated that panelists were also required to sign or submit a
previously completed conflict of interest form to attest to their
independence. In addition, panelists were given guidebooks to assess
applications that included the technical review criteria and were told
by FRA program officials to apply only these criteria during their
efforts. FRA also trained panelists during a 1-day orientation session.
* Assess applicants' capabilities to account for funds. FRA required
applicants to provide information on their ability to account for
funds. Specifically, applicants were asked to describe their
experience, if any, managing rail investment projects. If applicants
reported that they did not have experience on projects similar to the
one they were proposing, FRA instead asked applicants to include a
plan for building the capacity to manage the project. The application
also required applicants to provide information on their financial
management capability, including previous audit results, and the
applicants' ability to manage potential cost overruns and financial
shortfalls. In addition, FRA required applicants to submit
supplemental materials such as a detailed capital cost budget, which
provided a breakdown of the activities included in each application
and their anticipated cost. These pieces of information were assessed
by FRA through an eligibility panel, to ensure the application was
complete, and a technical review panel, to evaluate the applicants'
overall ability to manage the project.
* Notify applicants of awards decisions. FRA officials provided each
applicant with a letter indicating which applications were selected
and a general reason why individual applications were not selected.
While FRA did not include estimated award amounts in these
notification letters, this information was made publicly available on
the department's Web site and distributed through a press release. In
addition, most of the applicants we spoke with indicated that FRA
provided informal feedback on applications via telephone calls shortly
after the awards were announced. For example, an official from one
applicant stated that FRA provided information on ways to improve
applications that were not selected, which the applicant used when
applying for funds in future rounds.
* Document rationale for awards decisions. According to the guidance
from the department, Department of Commerce, the Department of
Education, and our work, agencies should document their rationale for
award decisions. As stated previously, FRA documented how it applied
the technical criteria for selected projects, and provided applicants
with a general explanation for selecting or rejecting individual
projects. However, as discussed in a previous section, in our view FRA
typically did not clearly document specific reasons for selecting
individual projects, reasons for not selecting other projects, or how
changes made to requested funding amounts might affect applicants'
ability to achieve project goals.
According to FRA, officials used lessons from a number of other
government programs when developing the method for evaluating and
selecting projects. For example, one of the officials responsible for
developing the funding announcement, technical review guidebooks, and
the format of the technical review panels stated that he relied on his
experience working with large transit grants to create a review that
was both quantifiable and allowed for subjective professional
judgment. In addition, this official noted that FRA examined the
methods used by other agencies, such as the Department of Health and
Human Services, the Department of Justice, and the Federal Transit
Administration, to develop and implement a list of best practices for
awarding discretionary grants.
FRA Publicly Communicated at Least as Much Outcome Information as Other
Competitively Awarded Recovery Act Grant Programs:
FRA publicly communicated outcome information, such as a list of
awards and the award amounts, at a level similar to or greater than
most other Recovery Act competitive grant programs that we examined.
Specifically, FRA communicated information on award decisions to the
public, but did not communicate the results of the technical review
that had contributed to these decisions. Only one of the programs that
we examined-—the Department of Education's State Innovation grants
(known as Race to the Tope[Footnote 28])-—publicly communicated the
results of its technical review, which include technical scores and
comments; however, this program used a much different approach for
selecting awardees than the HSIPR program.
Members of Congress and the President have emphasized the need for
accountability, efficiency, and transparency in the expenditure of
Recovery Act funds and have made it a central principle of the act.
However, the act did not define the attributes of transparency or how
deeply an agency's actions should be transparent.[Footnote 29] We also
did not find any non-Recovery Act requirement or guidance instructing
federal programs to publicly disclose the reasons for their selection
decisions. To assess the extent to which FRA publicly communicated
outcome information, we compared the HSIPR program to 21 other
Recovery Act competitive grant programs, including Race to the Top.
(See figure 4.) We selected 20 of these programs randomly from a list
of almost 200 competitively awarded grant programs that distributed
Recovery Act funds.[Footnote 30] We included the 21st program, Race to
the Top, because it was of interest to you.
Figure 4: HSIPR Reported Outcomes Compared to Other Competitively
Awarded Recovery Act Programs:
[Refer to PDF for image: illustrated table]
Outcomes communicated: Technical review (scores and comments);
Degree communicated: HSIPR: Information was not communicated;
Degree communicated: Other Recovery Act programs: Information was not
communicated;
Degree communicated: Race to the Top: Information was communicated.
Outcomes communicated: Selection decisions (awards and award amounts);
Degree communicated: HSIPR: Information was communicated;
Degree communicated: Other Recovery Act programs: Information was
Information was communicated for some programs, but not all;
Degree communicated: Race to the Top: Information was communicated.
Source: GAO analysis of publicly available data on discretionary
Recovery Act program grants.
[End of figure]
FRA publicly communicated at least as much outcome information as all
but one Recovery Act competitive grant programs we reviewed.
Specifically, FRA publicly communicated through its Web site the
selection decisions, including the amount of funds requested, general
benefits from the project, and the potential award amounts for the 62
Recovery Act applications that it selected. It did not communicate the
results of the technical review. Out of the other 21 competitively
awarded Recovery Act programs we examined, 13 communicated selection
information similar to FRA, including awards and award amounts, but
not the results of the technical review. For example, the Department
of Health and Human Services' National Institutes of Health published
a list of 21,581 award winners for nearly $9 billion, but, similar to
the HSIPR program, did not report the results of the technical review.
Eight other programs conveyed less information than FRA and did not
publicly communicate the results of the technical review or the awards
and award amounts.
Race to the Top was the only program we examined that publicly
provided the results of its technical review. These results, which
were posted on the Department of Education's Web site, included scores
and comments from reviewers for each applicant, but were not connected
to individual reviewers by name. According to its Web site, the
Department of Education decided to release this level of detailed
information because the $4 billion Race to the Top program was larger
than any other discretionary program the Department of Education had
previously administered, and officials sought to ensure the highest
level of integrity and transparency. Unlike the HSIPR program,
however, Race to the Top used these scores as the sole basis for
selecting awards and only chose applicants receiving the highest
scores. As described in the previous section, the technical review
scores were an important component for making HSIPR selection
decisions, but did not include consideration of additional pre-
established selection criteria designed to ensure long-term success
and sustainability of the program. As such, publishing them without
additional decision making information on the specific reasons for
selecting and not selecting individual applications could lead to
erroneous conclusions about FRA's decisions.
According to FRA officials, the results of the technical review were
not communicated because department officials were concerned that
associating technical review scores and comments with a specific
reviewer could discourage reviewers from participating in future
department competitive grant evaluations. Furthermore, in their view,
this might also prevent reviewers in future funding rounds from
providing candid evaluations. However, as the Race to the Top program
demonstrated, it would be possible for FRA to present overall
technical panel review assessments or their individual comments
without linking individuals' names to comments, if it chooses to do
so. FRA officials stated that the anonymous disclosure of technical
scores and comments would still prevent FRA and department leadership
and staff from frankly expressing their individual judgments, as they
might still be concerned over how theses opinions would reflect on the
FRA and HSIPR program if they were made public.
Conclusions:
The $8 billion appropriated by the Recovery Act for the High Speed
Intercity Passenger Rail program represents a large investment in the
development of a national passenger rail network. FRA established a
fair and objective approach for distributing these funds and
substantially followed recommended discretionary grant award practices
used throughout the government. The exception is what we view as
incomplete documentation of why some applications were chosen and not
others, and how FRA decided to distribute the funds at the time those
decisions were made. This incomplete documentation is notable given
the robust documentation of the other steps used to determine
eligibility and assess technical merit. We believe that establishing a
record that provides insight into why decisions were made, rather than
merely restating general technical review and selection criteria,
including amounts to be provided, would enhance the credibility of
FRA's awards decisions to the extent that this record confirms that
selected projects aligned with established criteria and goals. By not
establishing this record, FRA invites skepticism about the overall
fairness of its decisions, even if they are sound, and hinders
meaningful disclosure of how it made its decisions, if it chooses to
do so.
Recommendation for Executive Action:
To help ensure accountability over federal funds, we recommend that
the Secretary of Transportation direct the Administrator of the
Federal Railroad Administration to create additional records that
document the rationales for award decisions in future HSIPR funding
rounds, including substantive reasons (1) why individual projects are
selected or not selected and (2) for changes made to requested funding
amounts.
Agency Comments:
We provided a draft of this report to the Department of Transportation
for its review and comment. The department told us that it carefully
constructed the grant processes for the HSIPR program based on
extensive review and consideration of best practices both within and
outside the agency with the intent of providing a comprehensive and
transparent process. The department indicated that its overall intent
was to select the best projects that offered the greatest available
and achievable benefit to the nation. The department told us that it
would carefully consider our recommendation to determine if there are
means to further enhance the transparency of its grant selection
process with additional documentation, without creating a process that
is unduly burdensome to administer. The department also offered
technical comments which we incorporated as appropriate.
As agreed with your office, unless you publicly announce the contents
of this report earlier, we plan no further distribution until 30 days
from the report date. We are sending copies of this report to
congressional subcommittees with responsibilities for surface
transportation issues; the Director, Office of Management and Budget;
the Secretary of Transportation; and the Administrator of the Federal
Railroad Administration. In addition, this report will be available at
no charge on GAO's Web site at [hyperlink, http://www.gao.gov].
If you or your staff have any questions regarding this report, please
contact me at (202) 512-2834 or flemings@gao.gov. Contact points for
our Offices of Congressional Relations and Public Affairs may be found
on the last page of this report. GAO staff who made key contributions
to this report are Owen Bruce, Matthew Cook, Colin Fallon, Michele
Fejfar, Maria Gaona, Grant Mallie, James Ratzenberger, Douglas Sloane,
Matthew Voit, and Crystal Wesco.
Sincerely yours,
Signed by:
Susan A. Fleming:
Director, Physical Infrastructure Issues:
[End of section]
Appendix I: Extent to Which Recovery Act Projects Align with Statutory
and Other Goals:
We examined the extent to which American Recovery and Reinvestment Act
of 2009 (Recovery Act) projects selected by the Federal Railroad
Administration (FRA) align with legislative and the administration's
goals to develop high speed and conventional rail networks.
Congress Provided Broad Goals with a Priority for High Speed
Systems Congress provided its most recent expectations for high and
conventional speed rail in the Passenger Rail Investment and
Improvement Act of 2008 (PRIIA) and the Recovery Act. In this regard,
PRIIA speaks generally about supporting improvements to high and
conventional speed rail and does not set out any expectations for
relative attention to high and conventional speed passenger rail
improvements. The Recovery Act appropriated $8 billion for both forms
of rail service broadly. However, it required that FRA give priority
to projects that support the development of intercity high speed
service. Further, the act required that FRA develop a strategic plan
that describes how FRA will use Recovery Act funding to improve and
deploy high speed systems. FRA had wide latitude to achieve goals laid
out in its strategic plan.
FRA's Vision Describes Broad Goals for High Speed Rail, but Provides
Limited Detail on How Goals Will Be Achieved:
FRA has outlined its vision for developing intercity passenger rail
service in its strategic plan, as required by the Recovery Act, and in
both its preliminary national rail plan issued in 2009 and the plan's
update nearly a year later. FRA's vision documents—the strategic plan
and its updated national rail plan—described broad goals, such as for
transportation, safety, and economic competitiveness, and established
categories for the type of high speed rail projects it intends to
support. For example, the strategic plan notes the high speed rail
program aims to generate construction and operating jobs, while
providing a steady market for various industries producing rail,
control systems, locomotives, and passenger cars. In addition, the
plan notes that investments in high speed rail can result in
competitive trip times and rail transport can also result in higher-
density development as compared to other modes of transportation.
Similarly, the updated national rail plan sets a goal of connecting
communities through high speed rail while, among other things,
reducing congestion, boosting economic growth, and promoting economic
sustainability.
However, these vision documents provide limited details on goals for
the high speed rail program. For example, while the strategic plan
emphasizes investments that will yield tangible benefits to rail
performance and improve connections between different modes of
transportation, it does not describe how and when FRA intends to
realize these benefits. In addition, as we reported last June, the
preliminary rail plan did not offer specific recommendations for
future action and was designed to serve as a springboard for further
discussion with states and freight railroads.[Footnote 31] While the
update to this plan included improving rail performance as a goal and
provided some measurements for high speed rail performance, such as
competitive trip times, it did not provide any specific targets for
these metrics, or any time line showing when FRA hopes to attain these
improvements.
FRAs Application Selection Is Consistent with the Recovery Act's
Priority for High Speed Rail Service:
Consistent with the Recovery Act's direction to give priority for high
speed rail service, about half (45 percent) of the applications
selected were for core express corridors (high speed service of 125-
250 miles per hour or more) or regional corridors (higher-speed
service of 90-124 miles per hour) using categories of service similar
to those FRA established in its vision documents.[Footnote 32] (See
table 4.) FRA did not establish specific targets for the number of
each type of project it intended to support.[Footnote 33]
Table 4: Recovery Act Applications Supporting High Speed Rail
Categories by Future Corridor Speed 5 Years After Project Completion:
Category: Core express corridors;
Top speed: 125-250 miles per hour or more;
Number of projects meeting targeted corridor top speed: 5.
Category: Regional corridors;
Top speed: 90-124 miles per hour;
Number of projects meeting targeted corridor top speed: 23[A].
Category: Emerging high speed rail;
Top speed: Up to 90 miles per hour;
Number of projects meeting targeted corridor top speed: 21.
Source: GAO categorization of applications based on FRA information
and applicant data.
Note: We categorized these applications solely by future project speed
5 years after completion using the speeds reported at the time the
application was submitted. Thirteen applications did not provide
information on anticipated top speed. These applications anticipate a
variety of improvements, such as station rehabilitations, the
reconfiguration of rolling stock, and track and grade crossing
upgrades. FRA subsequently classified two of these projects as
supporting core express corridors, six as supporting regional
corridors, two of these projects as emerging routes, and the remaining
three projects as contributing to more than one category.
We relied on data submitted by applicants to FRA to assign
applications to categories. We have reported that applicants for major
infrastructure projects, such as high speed rail projects, often
overstate benefits, such as speed of service. See [hyperlink,
http://www.gao.gov/products/GA0-09-317].
Some projects may attain higher speeds than those reported in the
applications following negotiations between FRA and the various
states. In addition, because corridors may include multiple projects,
the top speed of a corridor may exceed those for some of its component
projects.
[A] Five of these applications had an estimated future speed of 110
miles per hour, but did not specify whether this speed would be
achieved within the 5 years following project completion.
[End of table]
Selected Applications Reflect Short-Term Economic Recovery and Long-
Term Infrastructure Investment Goals:
In addition to providing priority for high speed projects, the
applications that FRA selected were consistent with near-term economic
recovery goals and its long-term development goals. While most
selected projects are short-term in nature and are intended to support
economic recovery goals established by the Recovery Act, most funding
was provided to several long-term, high speed corridor projects.
Specifically, we found that 48 of the 62 applications selected were
track 1 applications, which are smaller projects designed to be
completed within 2 years. (See table 5.) These projects represent
about 11 percent of the funding provided for high speed rail and
intercity passenger rail through the Recovery Act. The remaining 89
percent of funding was provided for 14 track 2 applications, which are
primarily long-term, corridor projects. The funding allocation aligns
with FRA's focus on long-term investments that will support
development of a high speed passenger rail network as described in the
funding announcement.
Table 5: Amounts Awarded, Obligated, and Spent on First Round Track 1
and 2 Recovery Act Projects, as of December 31, 2010:
Project track: Track 1;
Number of applications: 48;
Amount awarded: $887 million;
Amount obligated: $71 million;
Amount spent: $0.
Project track: Track 2;
Number of applications: 14;
Amount awarded: $7.025 billion;
Amount obligated: $4.192 billion;
Amount spent: $50 million.
Project track: Total;
Number of applications: 62;
Amount awarded: $7.912 billion;
Amount obligated: $4.263 billion;
Amount spent: $50 million.
Source: GAO analysis of FRA data.
Note: This table does not include $15 million obligated or $10 million
spent by FRA for contracts associated with the award and oversight of
these grants.
[End of table]
While FRA announced in January 2010 awards of nearly $8 billion in
grants for the program, many of these projects have only recently
begun. As of December 31, 2010, FRA had obligated $4.2 billion, or
about 54 percent of the funding awarded in January, and about $50
million has been spent for projects selected under track 2.
In May 2009, FRA issued a plan for spending Recovery Act funds, which
it updated in July 2010. FRA missed its May 2009 targets for
obligations and spending through 2010 estimate because it had planned
to announce awards—and begin obligating funds—in the autumn of 2009.
However, FRA did not make those announcements until January 2010 and
did not begin to obligate funds until May 2010. FRA then revised its
estimates in July 2010. FRA surpassed the calendar year 2010 goals for
obligating and spending funds in the July 2010 plan. (See table 6.)
During calendar year 2010, FRA obligated about 11 times as much as
anticipated in the July 2010 plan, while awardees have spent about 7
times as much as planned over the same time period. The Recovery Act
authorized obligation of funds through September 30, 2012, and FRA
intends to obligate all funds by this date.[Footnote 34]
Table 6: FRA Plan for Obligating and Spending Recovery Act Funds and
Amounts Obligated and Spent, as of December 31, 2010:
Amount obligated:
May 2009 plan: $6.002 billion;
July 2010 plan: $400 million;
Actual: $4.263 billion.
Amount spent:
May 2009 plan: $1.760 billion.
July 2010 plan: $7 million;
Actual: $51 million.
Source: GAO analysis of FRA data.
Note: This table does not include $15 million obligated or $10 million
spent by FRA for contracts associated with the award and oversight of
these grants.
[End of table]
Passenger rail investments are often long-term efforts that must be
carried out in partnership between the state and others, notably
private railroads. For example, in order to begin design and
construction on many of these projects, grant recipients must
negotiate and secure agreements with private freight railroads to use
their tracks for passenger rail trains. However, officials from these
railroads are concerned that sharing tracks would create safety risks
and liability concerns, prevent freight expansion, and cause rail
congestion. Some of the states have experienced delays finalizing
these agreements with the railroads and, accordingly, have not
completed agreements with FRA to obligate awarded funding.
[End of section]
Appendix II: Scope and Methodology Criteria Used to Select Projects:
To determine the extent to which FRA applied its established criteria
to select projects, we identified the criteria that it planned to use
from its June 23, 2009, funding announcement outlining its evaluation
and selection approach. We then compared these criteria to the
worksheets and guidebooks that FRA used to determine eligibility and
assess technical merit. Finally, we interviewed FRA officials who
participated in evaluating and selecting projects to obtain
information on whether and how they applied the established criteria.
Specifically, we randomly selected 1 technical reviewer from each of
the 12 track 1, 3, and 4 panels (12 out of 36 reviewers), and 6 of the
8 reviewers from the track 2 panel. In addition, we interviewed senior
FRA officials to further understand how senior Department of
Transportation (the department) and FRA officials applied the
selection criteria, selected projects, and determined the amount of
funding provided for each project. We also asked FRA officials to
provide reasons for why several lower scored applications were
selected, while other higher scored applications were not.
We conducted semi-structured interviews with officials from 10 of the
40 states and the District of Columbia that submitted a preapplication
or an application for track 1 and track 2 funding about how FRA
communicated its approach to reviewing applications and award results.
[Footnote 35] We selected these states on the basis of four
characteristics: (1) the extent to which applicants progressed through
the preapplication, application, evaluation, and selection stages; (2)
geographic regions; (3) the number of applications submitted; and (4)
the amount of funding. We also contacted officials in two additional
states (Ohio and Washington) to understand the effect of FRA's funding
decisions on the scope of these states' proposed rail program.
[Footnote 36] Our efforts were limited to applications requesting
funding under track 1 and track 2 of the High Speed Intercity
Passenger Rail Program (HSIPR) in August 2009 and October 2009 and
awarded Recovery Act funding for projects in January 2010. We did not
review FRA's rationale for its decision in December 2010 to
redistribute $1.195 billion from two projects in Ohio and Wisconsin to
on-going high speed rail projects in 13 states.
We also assessed whether FRA's approach to calculating reviewers'
individual scores and compiling them for an overall panel score
reflected the criteria and weights for each criterion as published in
the funding announcement as well as the overall reliability of the
data used to make these calculations. To do this, we reviewed
documentation about the system used to collect the information and
spoke with officials knowledgeable about the data. We found some
inaccuracies in how FRA calculated the technical review scores.
Specifically, we found that some standardized scores were incorrect
due to the inclusion of three duplicate records and three applications
deemed not yet ready or ineligible. In addition, we noted FRA
incorrectly weighted some technical evaluation scores for applications
submitted under track 1b. However, we determined that these errors
would not materially affect our findings and for the purposes of
examining the effect of the scores on application selection, we found
the data to be sufficiently reliable. FRA officials said that they
would correct their calculations for future rounds of rail funding.
Further we performed tests to determine the variables (e.g., technical
review scores and number of applications submitted) that had a
significant statistical relationship with being selected for an award.
Our approach is described in appendix IV.
Following Recommended Practices for Discretionary Grant Awards:
To determine the extent to which FRA used recommended practices for
awarding discretionary grants, we examined Office of Management and
Budget guidance, guidance from several federal agencies, and our
reports on this issue. (See table 7.) We identified key grant practices
recommended across executive branch agencies and compared them to
practices analyzed in our prior work.[Footnote 37] Specifically, we
identified six recommended practices relating to (1) communicating
with potential applicants prior to the competition, (2) planning for
administering the review of applications, (3) developing a technical
review panel with certain characteristics, (4) assessing applicants'
abilities to manage grant funds, (5) notifying applicants of
decisions, and (6) documenting reasons for award decisions. We
compared these practices to information from the 2009 funding
announcement, guidance to applicant reviewers, and to statements made
by FRA officials regarding their implementation of their grants award
program. For this effort, one analyst carried out the comparison and a
second analyst verified the comparison results. Where differences
existed, the two analysts discussed them and reached agreement. We
also discussed the extent of FRA's use of several of these practices
with the officials from our sample of 10 states.
Table 7: Guidance and Reports Used To Identify Recommended Government
Practices:
Federal agency:
Source: Department of Commerce;
Guidance or report: Grants and Cooperative Agreements Manual (June
2007).
Source: Department of Energy;
Guidance or report: Merit Review Guide for Financial Assistance
(August 2007).
Source: Department of Labor;
Guidance or report: U.S. Department of Labor, Veterans' Employment and
Training Service Guide to Competitive and Discretionary Grants (April
2003).
Source: Department of Transportation;
Guidance or report: Financial Assistance Guidance Manual (March 2009).
Source: Office of Management and Budget;
Guidance or report: Office of Federal Financial Management Policy
Directive on Financial Assistance Program Announcements, 68 FR 37370
(June 23, 2003).
GAO:
Guidance or report: Runaway and Homeless Youth Grants: Improvements
Needed in the Grant Award Process, [hyperlink,
http://www.gao.gov/products/GA0-10-335] (Washington, D.C.: May 10,
2010);
Guidance or report: Discretionary Grants: Further Tightening of
Education's Procedures for Making Awards Could Improve Transparency
and Accountability, [hyperlink,
http://www.gao.gov/products/GAO-06-268] (Washington, D.C.: Feb. 21,
2006);
Guidance or report: Grants Management Despite Efforts to Improve Weed
and Seed Program Management, Challenges Remain, [hyperlink,
http://www.gao.gov/products/GAO-04-245] (Washington, D.C.: Mar. 24,
2004)
Guidance or report: Education Discretionary Grants: Awards Process
Could Benefit From Additional Improvements, [hyperlink,
http://www.gao.gov/products/GAO/HEHS-00-55] (Washington, D.C.: Mar.
30, 2000);
Guidance or report: Standards for Internal Control in the Federal
Government, [hyperlink,
http://www.gao.gov/products/GAO/AIMD-00-21.3.1] (Washington, D.C.:
November 1999).
Governmentwide:
Source: Grant Accountability Project[A];
Guidance or report: Grant Accountability Project, Guide to
Opportunities for Improving Grant Accountability (October 2005).
Source: GAO.
[End of table]
This project was initiated by the Domestic Working Group, which
consists of 19 federal, state, and local audit organizations and is
chaired by the Comptroller General of the United States. The purpose
of the group is to identify current and emerging challenges of mutual
interest and explore opportunities for greater collaboration within
the intergovernmental audit community.
Communication of Selection Results:
To determine the extent FRA publicly communicated information about
the results of its award competition, we compared the information it
communicated to the public about its awards to the types of
information communicated by a random sample of 20 other competitively
awarded Recovery Act programs. (See table 8.) We selected the sample
from 193 Recovery Act programs identified in the Catalog of Federal
Domestic Assistance as competitive grant programs using Recovery Act
funds.[Footnote 38] In addition, we compared the information
communicated about FRA's awards to the information communicated by the
Innovation Grants program (Race to the Top)—a discretionary grant
program run by the Department of Education. We included the Race to
the Top program because you expressed interest in it.
Table 8: Recovery Act Discretionary Grant Programs Reviewed:
Program: Broadband Technology Opportunities Program;
Responsible federal agency: Department of Commerce.
Program: Central Valley Project Improvement Act, Title XXXIV;
Responsible federal agency: Department of the Interior.
Program: Emergency Medical Services for Children (Recovery Act);
Responsible federal agency: Department of Health and Human Services.
Program: Emergency Watershed Protection Program;
Responsible federal agency: Department of Agriculture.
Program: Fish and Wildlife Coordination Act;
Responsible federal agency: Department of the Interior.
Program: Geologic Sequestration Training and Research Grant Program;
Responsible federal agency: Department of Energy.
Program: Grants to Health Center Programs (Recovery Act);
Responsible federal agency: Department of Health and Human Services.
Program: Head Start (Recovery Act);
Responsible federal agency: Department of Health and Human Services.
Program: National Geospatial Program: Building The National Map;
Responsible federal agency: Department of the Interior.
Program: National Railroad Passenger Corporation Grants;
Responsible federal agency: Department of Transportation.
Program: Office of Science Financial Assistance Program;
Responsible federal agency: Department of Energy.
Program: Pregnancy Assistance Fund Program;
Responsible federal agency: Department of Health and Human Services.
Program: Preventing Healthcare—-Associated Infections (Recovery Act);
Responsible federal agency: Department of Health and Human Services.
Program: Prevention and Wellness-—Leveraging National Organizations
(Recovery Act);
Responsible federal agency: Department of Health and Human Services.
Program: Recovery Act Grants for Training in Primary Care Medicine and
Dentistry Training and Enhancement;
Responsible federal agency: Department of Health and Human Services.
Program: Recovery Act Transitional Housing;
Responsible federal agency: Department of Justice.
Program: Science Grants for Basic Research, Educational Outreach, or
Training Opportunities (Recovery Act);
Responsible federal agency: National Aeronautics and Space
Administration.
Program: Senior Community Service Employment Program;
Responsible federal agency: Department of Labor.
Program: State Fiscal Stabilization Fund Race-to-the-Top Incentive
Grants (Recovery Act);
Responsible federal agency: Department of Education.
Program: State Grants to Promote Health Information Technology
(Recovery Act);
Responsible federal agency: Department of Health and Human Services.
Program: Trans-National Institutes of Health Research Support
(Recovery Act);
Responsible federal agency: Department of Health and Human Services.
Source: GAO.
[End of table]
We first reviewed materials on FRA's Web site and other public
releases, such as press releases and outreach presentations to
determine what FRA publicly communicated. We then discussed these
results with FRA officials to confirm our results.
For each of the 21 other Recovery Act programs, we reviewed three
public information sources: (1) the program's Catalog of Federal
Domestic Assistance award announcement, (2) internet search results,
and (3) Grants.gov, which provides information on more than 1,000
grant programs.[Footnote 38] For each program, we searched these
sources for information about final award results (project
description, why the project was selected, and award amount) and for
information that demonstrated how applications fared at different
states of the process (eligibility determination and internal reviews,
such as technical review panels). We defined the results of any
technical review as either scores or comments, and when at least one
of these elements was listed in at least one of the three sources of
information, we concluded that technical review information was
publicly communicated about the program. In carrying out this
assessment, one analyst carried out the work and a second analyst
independently performed the same tasks. The two analysts then compared
their results and resolved any differences. The results of our
comparison to a sample of other Recovery Act programs are not
generalizable across all Recovery Act programs.
Alignment with Statutory and Other Goals:
To determine the extent to which HSIPR applications align with
statutory and other goals, we reviewed federal laws, including the
Recovery Act and PRIIA. We analyzed FRA's Federal Register notice
describing its approach for selecting applications, its strategic
vision for high speed rail, and its preliminary national rail plan and
its subsequent update to gather information on any goals the agency
has established for high speed rail networks and conventional service
and the types of projects it seeks to support. We did not assess
whether the applications selected by FRA will achieve the stated
benefits or costs.
We reviewed information submitted by applicants, namely the type of
project proposed, the funding requested and awarded, and the estimated
future speed of the projects. We used this data to sort projects into
three categories developed by FRA: core express corridors, regional
corridors, and emerging high speed rail routes. FRA's definition of
top speeds within these categories overlap, which we modified slightly
to provide discrete endpoints.
Of the 62 applications selected by FRA, 13 did not provide data on
anticipated top speed after project completion. These 13 applications
include a variety of improvements, including station rehabilitations,
the reconfiguration of rolling stock, and existing tracks and grade
crossings upgrades for which one would not expect top speed
information. We used these data as background on selected applications
and did not assess them for reliability. We also reviewed FRA's
Recovery Act plans and compared FRA goals for obligating and spending
awarded funds to its actual rates of obligating and spending from
January 2010 through December 2010. After reviewing a Department of
Transportation Inspector General audit report on its financial
management system and speaking with department officials familiar with
the system, we determined that these data were sufficiently reliable.
[End of section]
Appendix III: Difference Between the Amounts Requested and Estimated
Awards by State:
In January 2010, FRA proposed to provide 18 of the 24 states,
including the District of Columbia, selected for awards all or nearly
all (91 percent or more) of the money that they requested. (See table
9.) The agency proposed to provide one state, North Carolina, with
slightly more than it requested and the remaining five states with
amounts varying from 47 percent to 86 percent of the amounts requested.
Table 9: Difference between the Amounts Requested and Estimated Awards
by State, as of January 2010:
State: North Carolina;
Amount requested: $523.8 million;
FRA proposed amount: $545.0 million;
Difference (percent): $21.2 million (104%).
State: District of Columbia;
Amount requested: $2.9 million;
FRA proposed amount: $2.9 million;
Difference (percent): $0.0 (100%).
State: Maryland;
Amount requested: $69.4 million;
FRA proposed amount: $69.4 million;
Difference (percent): $0.0 (100%).
State: Michigan;
Amount requested: $40.3 million;
FRA proposed amount: $40.3 million;
Difference (percent): $0.0 (100%).
State: New Jersey;
Amount requested: $38.5 million;
FRA proposed amount: $38.5 million;
Difference (percent): $0.0 (100%).
State: Pennsylvania;
Amount requested: $25.7 million;
FRA proposed amount: $25.7 million;
Difference (percent): $0.0 (100%).
State: Rhode Island;
Amount requested: $1.2 million;
FRA proposed amount: $1.2 million;
Difference (percent): $0.0 (100%).
State: Texas;
Amount requested: $3.8 million;
FRA proposed amount: $3.8 million;
Difference (percent): $0.0 (100%).
State: Virginia;
Amount requested: $74.8 million;
FRA proposed amount: $74.8 million;
Difference (percent): $0.0 (100%).
State: Wisconsin;
Amount requested: $831.7 million;
FRA proposed amount: $822.0 million;
Difference (percent): -$9.7 million (99%).
State: Indiana;
Amount requested: $71.4 million;
FRA proposed amount: $71 million;
Difference (percent): -$0.4 million (99%).
State: Iowa;
Amount requested: $17.3 million;
FRA proposed amount: $17 million;
Difference (percent): -$0.3 million (98%).
State: Illinois;
Amount requested: $1.275.3 billion;
FRA proposed amount: $1.233.0 billion;
Difference (percent): -$42.3 million (97%).
State: Connecticut;
Amount requested: $41.1 million;
FRA proposed amount: $40.0 million;
Difference (percent): -$1.1 million (97%).
State: Massachusetts;
Amount requested: $72.9 million;
FRA proposed amount: $70.0 million;
Difference (percent): -$2.9 million (96%).
State: New York;
Amount requested: $157.4 million;
FRA proposed amount: $150.0 million;
Difference (percent): -$7.4 million (95%).
State: Vermont;
Amount requested: $52.7 million;
FRA proposed amount: $50.0 million;
Difference (percent): -$2.7 million (95%).
State: Missouri;
Amount requested: $33.3 million;
FRA proposed amount: $31.0 million;
Difference (percent): -$2.3 million (93%).
State: Maine;
Amount requested: $38.4 million;
FRA proposed amount: $35.0 million;
Difference (percent): -$3.4 million (91%).
State: Oregon;
Amount requested: $9.4 million;
FRA proposed amount: $8.0 million;
Difference (percent): -$1.4 million (86%).
State: Ohio;
Amount requested: $563.8 million;
FRA proposed amount: $400.0 million;
Difference (percent): -$163.8 million (71%).
State: Washington;
Amount requested: $976.4 million;
FRA proposed amount: $590.0 million;
Difference (percent): -$386.4 million (60%).
State: California[A];
Amount requested: $4.766.0 billion;
FRA proposed amount: $2.343.0 billion;
Difference (percent): -$2.423.0 billion (49%).
State: Florida;
Amount requested: $2.654.0 billion;
FRA proposed amount: $1.250.0 billion;
Difference (percent): -$1.404.0 billion (47%).
Source: GAO analysis of FRA data.
[A] There were two different entities submitting applications for
projects in California. The California Department of Transportation
submitted track 1a and 1 b applications, and the California High Speed
Rail Authority, a public agency established by California to develop
high speed rail, submitted track 2 applications.
[End of table]
In December 2010, nearly a year after making these proposals, FRA
announced that $1.195 billion in Recovery Act funds for high speed
rail-representing most of the $810 million for Wisconsin's Milwaukee-
Madison corridor and $385 million for Ohio's Cincinnati-Columbus-
Cleveland "3C" route, originally designated for these states in
January 2010-would be redirected to high speed rail projects already
underway in 13 other states.[Footnote 39] In making these changes, FRA
noted that Wisconsin has suspended work under its existing high speed
rail agreement and the incoming governors in Wisconsin and Ohio have
both indicated that they will not move forward to use high speed rail
money received under Recovery Act. The adjusted amounts resulted in
FRA proposing to provide all or nearly all of the original request
amounts (91 percent or more) for one additional state (Oregon). (See
table 10.) While most of the funding was redistributed to three states
(California, Florida, and Washington), the total funding awarded to
these three states was less than 80 percent of their original requests.
Table 10: Difference between the Amounts Requested and Estimated
Awards by State, as of December 2010:
State: North Carolina;
Applicant requested amount: $523.8 million;
FRA adjusted amount: $546.5 million;
Difference (percent): $22.7 million (104%).
State: District of Columbia;
Applicant requested amount: $2.9 million;
FRA adjusted amount: $2.9 million;
Difference (percent): $0.0 (100%).
State: Illinois;
Applicant requested amount: $1.275.3 billion;
FRA adjusted amount: $1.275.3 billion;
Difference (percent): $0.0 (100%).
State: Indiana;
Applicant requested amount: $71.4 million;
FRA adjusted amount: $71.4 million;
Difference (percent): $0.0 (100%).
State: Iowa;
Applicant requested amount: $17.3 million;
FRA adjusted amount: $17.3 million;
Difference (percent): $0.0 (100%).
State: Maryland;
Applicant requested amount: $69.4 million;
FRA adjusted amount: $69.4 million;
Difference (percent): $0.0 (100%).
State: Michigan;
Applicant requested amount: $40.3 million;
FRA adjusted amount: $40.3 million;
Difference (percent): $0.0 (100%).
State: New Jersey;
Applicant requested amount: $38.5 million;
FRA adjusted amount: $38.5v;
Difference (percent): $0.0 (100%).
State: Oregon;
Applicant requested amount: $9.4 million;
FRA adjusted amount: $9.4 million;
Difference (percent): $0.0 (100%).
State: Pennsylvania;
Applicant requested amount: $25.7 million;
FRA adjusted amount: $25.7 million;
Difference (percent): $0.0 (100%).
State: Rhode Island;
Applicant requested amount: $1.2 million;
FRA adjusted amount: $1.2 million;
Difference (percent): $0.0 (100%).
State: Texas;
Applicant requested amount: $3.8 million;
FRA adjusted amount: $3.8 million;
Difference (percent): $0.0 (100%).
State: Vermont;
Applicant requested amount: $52.7 million;
FRA adjusted amount: $52.7 million;
Difference (percent): $0.0 (100%).
State: Virginia;
Applicant requested amount: $74.8 million;
FRA adjusted amount: $74.8 million;
Difference (percent): $0.0 (100%).
State: Maine;
Applicant requested amount: $38.4 million;
FRA adjusted amount: $38.3 million;
Difference (percent): -$0.1 million (100%).
State: Massachusetts;
Applicant requested amount: $72.9 million;
FRA adjusted amount: $72.8 million;
Difference (percent): -$0.1 million (100%).
State: Missouri;
Applicant requested amount: $33.3 million;
FRA adjusted amount: $33.2 million;
Difference (percent): -$0.1 million (100%).
State: New York;
Applicant requested amount: $157.4 million;
FRA adjusted amount: $157.3 million;
Difference (percent): -$0.1 million (100%).
State: Connecticut;
Applicant requested amount: $41.1 million;
FRA adjusted amount: $40.0 million;
Difference (percent): -$1.1 million (97%).
State: Washington;
Applicant requested amount: $976.4 million;
FRA adjusted amount: $751.5 million;
Difference (percent): -$224.9v (77%).
State: California[A];
Applicant requested amount: $4.766.0 billion;
FRA adjusted amount: $2.967.0 billion;
Difference (percent): -$1.799.0 billion (62%).
State: Florida;
Applicant requested amount: $2.654.0 billion;
FRA adjusted amount: $1.592.3 billion;
Difference (percent): -$1.061.7 billion (60%).
State: Wisconsin;
Applicant requested amount: $831.7 million;
FRA adjusted amount: $44.0 million;
Difference (percent): -$787.7 million (5%).
State: Ohio;
Applicant requested amount: $563.8 million;
FRA adjusted amount: $15.0 million;
Difference (percent): -$548.8 million (3%).
Source: GAO analysis of FRA data.
Note: Due to rounding the percentage difference between applicant
requested and FRA adjusted amounts may equal 100, even when there is a
small dollar difference.
[A] There were two different entities submitting applications for
projects in California. The California Department of Transportation
submitted track la and 11a b applications, and the California High
Speed Rail Authority, a public agency established by California to
develop high speed rail, submitted track 2 applications.
[End of table]
[End of section]
Appendix IV: Additional Results from Our Statistical Analysis of Award
Decisions:
This appendix contains information related to our statistical analyses
of FRA and application data to examine possible relationships between
several variables and FRA's selection decisions.
Overview of the Data:
We obtained the data for our analysis from the Application Review
Module of GrantSolutions, the database FRA used to store application
information and technical review scores. Our analysis examined all 206
out of 259 submitted applications which FRA deemed eligible and ready
to receive federal funds. Eligible applications included those
requesting Recovery Act funds, tracks 1 and 2, as well as those
requesting annual appropriations, tracks 3 and 4. We included track 3
and 4 applications in our analysis because FRA reviewed, weighted, and
calculated the results for tracks 1, 3, and 4 applications as a group
rather than by distinct tracks.[Footnote 40]
To assess the reliability of the data in Application Review Module, we
reviewed database user manuals, spoke with officials knowledgeable
about the data, and conducted a series of data tests. We found some
inaccuracies in how FRA calculated the technical review scores.
Specifically, we found that some final technical review scores were
incorrect due to the inclusion of three duplicate technical review
scores and three applications later determined to be not yet ready or
ineligible.[Footnote 41] In addition, FRA had mistakenly applied
incorrect weights to the track 1b application technical review scores,
which resulted in 15 final scores that were one point higher than they
should have been and another 5 final scores that were one point lower
than they should have been. We determined that these errors would not
materially affect our findings and for the purposes of examining the
effect of scores on application selection, found these data are
sufficiently reliable.
Methodology:
To determine the extent to which specific variables were related to
the department's selection of applications, we considered a set of
bivariate tables and conducted a series of bivariate and multivariate
regression analyses.[Footnote 42] From the tables and regression
analyses we were interested in determining how the department's
decision to select an application for an award was affected by four
variables: (1) the technical review scores, (2) application track, (3)
the requested funding amount, and (4) the number of applications
submitted by state or groups of states.
Our analyses provide us with estimates, called odds ratios, which
indicate the differences in the odds of applications being selected
for an award across certain categories of the different variables we
examined.[Footnote 43] An odds ratio of 1.0 would indicate that
applications in different categories were equally likely to be
selected for an award. An odds ratio of less than 1.0 implies that
applications in the category to which the odds ratio applies were less
likely to be selected relative to those they are being compared to
(known as the "reference" category). For example, if applications
receiving a technical review score of a 3 had an odds ratio of 0.5 it
would indicate that they were half as likely to be selected for an
award as applications that received a score of 1 or 2 (the reference
category). Inversely, an odds ratio greater than 1.0 suggests that
applications with that characteristic were more likely to be selected.
For example, if applications receiving a technical review score of a 5
had an odds ratio of 3.0, we would conclude that applications
receiving that score were three times more likely to be selected
relative to the reference category. The primary reason for preferring
odds ratios to describe the relationships across variables is because
the significance of the differences between specific odds ratios can
be easily tested and the ratios can be re-estimated after considering
other variables.
Technical Review Score Affected the Selection of Applications:
We first examined the effect of technical review scores on the
likelihood of being selected for an award, and found that the odds of
being selected for an award were in general greater for applications
receiving higher technical review scores than for applications
receiving lower ones. For the purposes of our analyses we combined
scores of 1 and 2, as there were only five applications that had
received a score of 1 and there was no evidence that they were
significantly different from applications that had been assigned
scores of 2, in terms of being selected for funding. A smaller
percentage of the applications that received scores of 1 or 2 were
selected for funding (16 percent selected) than applications that had
received a score of 3 (46 percent selected) or 4 (42 percent
selected), and applications that received a score of 5 had the highest
percentage of being selected for funding (69 percent selected). In
addition, the odds ratios of 4.30, 3.67, and 11.57 indicate that
applications receiving a higher technical review score (3, 4, or 5,
respectively) were at least three times more likely to be selected for
an award than those receiving a lower technical review score (i.e., 1
or 2). (See table 11.)
Table 11: Applications Selected by Technical Review Score, and Odds
and Odds Ratios Derived from Them:
Technical review score: 1 or 2;
Selected: No: 36;
Selected: Yes: 7;
Percent selected: 16%;
Odds on selected: 0.19;
Odds ratios: reference.
Technical review score: 3;
Selected: No: 49;
Selected: Yes: 41;
Percent selected: 46%;
Odds on selected: 0.84;
Odds ratios: 4.30.
Technical review score: 4;
Selected: No: 35;
Selected: Yes: 25;
Percent selected: 42%;
Odds on selected: 0.71;
Odds ratios: 3.67.
Technical review score: 5;
Selected: No: 4;
Selected: Yes: 9;
Percent selected: 69%;
Odds on selected: 2.25;
Odds ratios: 11.57.
Source: GAO analysis of FRA data.
Note: The differences across score categories are significant given
the low probability associated with the likelihood ratio chi-square
statistic calculated to test the independence of scores and selection
(L2 = 17.14 with 3 df, P < 0.01).
This table includes track 1 a, 1 b, 2, 3, and 4 applications and,
therefore, does not match the data provided in the body of this report.
[End of table]
We followed several steps to calculate the odds ratios of 4.30, 3.67,
and 11.57. First, we derived the odds that applications with certain
technical review scores would be selected for an award. For example,
to determine the selection odds for applications receiving a score of
1 or 2, we divided the number of applications receiving a score of 1
or 2 that were selected by the number applications receiving those
scores that were not selected. Seven were selected for awards, whereas
36 were not; the resulting odds (7/36) equal 0.19. This means that 19
applications receiving a score of 1 or 2 would be selected for an
award for every 100 that were not. By comparison, the odds on being
selected for applications receiving a technical review score of 3 were
41/49, or 0.84, which indicates that 84 applications receiving a score
of 3 would be selected for an award for every 100 that were not. The
odds ratio comparing these two odds is 0.84/0.19 equal to 4.30. This
odds ratio suggests that the odds of being selected for an award are
more than four times greater for applications receiving a technical
review score of 3 than for applications receiving a score of 1 or 2.
Application Track Affected the Likelihood of Applications Being
Selected for Award:
We also found that there were sizable differences in the likelihood of
applications submitted under different tracks being selected for an
award. While only between one-quarter and one-third of the
applications in tracks 1a and 1b were selected, 61 percent of track 2
applications were selected, as were nearly three-fourths of the
applications in tracks 3 and 4. These differences are also apparent
from looking at the odds and odds ratios in table 12. The odds on
being selected for funding were slightly lower (by a factor of 0.77)
for track 1b applications than for track la, but they were more than
three times greater for track 2 applications than for track 1a
applications, and more than five times greater for track 3 and track 4
applications than for track 1a applications. (See table 12.)
Table 12: Applications Selected by Track, and Odds and Odds Ratios
Derived from Them:
Track: 1a;
Selected: No: 68;
Selected: Yes: 33;
Percent selected: 33%;
Odds on selected: 0.49;
Odds ratios: reference.
Track: 1b;
Selected: No: 40;
Selected: Yes: 15;
Percent selected: 27%;
Odds on selected: 0.38;
Odds ratios: 0.77.
Track: 2;
Selected: No: 9;
Selected: Yes: 14;
Percent selected: 61%;
Odds on selected: 1.56;
Odds ratios: 3.21.
Track: 3 or 4;
Selected: No: 7;
Selected: Yes: 20;
Percent selected: 74%;
Odds on selected: 2.86;
Odds ratios: 5.89.
Source: GAO analysis of FRA data.
Note: The differences across tracks are statistically significant
given the likelihood ratio chi-square statistic calculated to test the
independence of tracks and selection (L2 = 23.17 with 3 df, P < 0.01).
[End of table]
Amount Requested Had an Effect on Likelihood of Selection:
There were also sizable differences in the likelihood of applications
being selected based on the amount requested. Slightly more than half
of the applications that requested less than $1 million were funded,
as were exactly half of the applications that requested $50 million or
more. At the same time, roughly 40 percent of applications requesting
between $1 million and $10 million were funded, and less than one-
fourth of the applications requesting $10 to $50 million were funded.
The odds and odds ratios indicate that applications requesting the
lowest amounts were the most likely to be selected and that
applications requesting the highest amounts were almost as likely as
those requesting the lowest amounts to be selected. Applications
requesting more than $1 million but less than $50 million were
somewhat less likely to be selected than applications requesting less
than $1 million or more than $50 million. (See table 13.)
Table 13: Applications Selected by Requested Amount, and Odds and Odds
Ratios Derived from Them:
Amount requested: $100,000-999,999;
Selected: No: 18;
Selected: Yes: 21;
Percent selected: 54%;
Odds on selected: 1.17;
Odds ratios: reference.
Amount requested: $1,000,000-9,999,999;
Selected: No: 44;
Selected: Yes: 29;
Percent selected: 40%;
Odds on selected: 0.66;
Odds ratios: 0.56.
Amount requested: $10,000,000-49,999,999;
Selected: No: 43;
Selected: Yes: 13;
Percent selected: 23%;
Odds on selected: 0.30;
Odds ratios: 0.26.
Amount requested: $50,000,000 or more;
Selected: No: 19;
Selected: Yes: 19;
Percent selected: 50%;
Odds on selected: 1.00;
Odds ratios: 0.86.
Source: GAO analysis of FRA data.
Note: The differences across requested amount categories are
statistically significant given the likelihood ratio chi-square
statistic calculated to test the independence of amount requested and
selection (L2 = 11.66 with 3 df, P < 0.01).
[End of table]
Number of Applications per State Had Sizable Effect on the Likelihood
of Application Selection:
We examined the differences of applications being selected by each
state and, ultimately, by the number of applications submitted in many
of the states. We first considered the number of applications selected
for each of the 34 states that submitted eligible applications. Of
these 34, 4 states submitted more than 10 applications, 22 states
submitted 3 or fewer applications, and 9 states submitted a single
application. We found a statistically significant relationship
indicating there was a much greater tendency for applications to be
selected when they came from states in which a maximum of three
applications were submitted.[Footnote 44]
Given the low number of applications submitted by many of the states,
however, we could not control for all of the differences between
states in a multivariate analysis in which the effects of the other
variables are estimated simultaneously. Therefore, we combined the
states with smaller numbers of applications into two groups: one group
contained states which submitted one to three applications and the
other group contained states submitting four to nine applications.
These groupings did not result in the loss of any significant
information with respect to differences in the likelihood of
applications being selected across states.[Footnote 45] The results of
these state groupings indicate that the percentage of applications
selected for funding from states with one to three applications (70
percent selected) were considerably higher than the percentage of
funded applications from states with four to nine applications (40
percent selected). In addition, those states that submitted more than
nine applications showed considerable differences in the percent of
applications selected. California (37 percent selected) and Missouri
(75 percent selected) had a relatively high percentage of applications
selected, and New York (18 percent selected) and Washington state (5
percent selected) had a relatively low percentages of applications
selected.
As in the previous tables, the odds and odds ratios give us the same
sense of the association that the percentages reveal; the odds on
being selected for funding were more than three times higher for
applications from states submitting one to three applications than for
applications from California or from states submitting four to nine
applications (2.33/0.68, which equals 3.43). In addition, New York and
Washington state were much less likely to likely to have an
application selected than California and Missouri. (See table 14.)
Table 14: Applications Selected by State and State Group, and Odds and
Odds Ratios Derived from Them:
State and state group: States with 1 to 3 applications;
Selected for funding: No: 12;
Selected for funding: Yes: 28;
Percent selected: 70%;
Odds on selected: 2.33;
Odds ratios: 3.94.
State and state group: States with 4 to 9 applications;
Selected for funding: No: 31;
Selected for funding: Yes: 21;
Percent selected: 40%;
Odds on selected: 0.68;
Odds ratios: 1.14.
State and state group: Missouri;
Selected for funding: No: 3;
Selected for funding: Yes: 9;
Percent selected: 75%;
Odds on selected: 3.00;
Odds ratios: 5.06.
State and state group: Washington;
Selected for funding: No: 20;
Selected for funding: Yes: 1;
Percent selected: 5%;
Odds on selected: 0.05;
Odds ratios: 0.08.
State and state group: New York;
Selected for funding: No: 31;
Selected for funding: Yes: 7;
Percent selected: 18%;
Odds on selected: 0.23;
Odds ratios: 0.38.
State and state group: California;
Selected for funding: No: 27;
Selected for funding: Yes: 16;
Percent selected: 37%;
Odds on selected: 0.59;
Odds ratios: reference.
Source: GAO analysis of FRA data.
Note: The differences across states and groups of states are
statistically significant given the likelihood ratio chi-square
statistic calculated to test the independence of states and state
groups and selection (L2 = 43.32 with 5 df, P < 0.01).
[End of table]
Regression Analyses Show that Technical Review Score and Number of
Applications Submitted Significantly Affected the Likelihood of
Selection:
We also examined the data using bivariate and multivariate logistic
regression models to estimate the effects of these different variables
on the likelihood of applications being selected for funding. The
bivariate models examine the effects of the technical review score,
track, amount requested, and state or group of states from which the
application arose, one at a time. The odds ratios from these models
are the same as those produced from the observed frequencies in the
different two-way tables described above. From these models, however,
we obtain specific tests of the significance of the differences
between each variable category to determine more generally whether
there are differences between any of the categories. In the bivariate
regression model we find that many, but not all, of the odds ratios
describing these differences are significant. (See table 15.)
Table 15: Odds Ratios from Bivariate and Multivariate Logistic
Regression Models by Technical Review Score, Track, Amount Requested,
and State and State Group:
Variable category: Technical review score: 1 or 2;
Bivariate logistic regressions: reference;
Multivariate logistic regressions: reference.
Variable category: Technical review score: 3;
Bivariate logistic regressions: 4.30[A];
Multivariate logistic regressions: 6.88[A].
Variable category: Technical review score: 4;
Bivariate logistic regressions: 3.67[A];
Multivariate logistic regressions: 7.53[A].
Variable category: Technical review score: 5;
Bivariate logistic regressions: 11.57[A];
Multivariate logistic regressions: 9.36[A].
Variable category: Track: 1a;
Bivariate logistic regressions: reference;
Multivariate logistic regressions: reference.
Variable category: Track: 1b;
Bivariate logistic regressions: 0.77;
Multivariate logistic regressions: 0.60.
Variable category: Track: 2;
Bivariate logistic regressions: 3.21[A];
Multivariate logistic regressions: 2.34.
Variable category: Track: 3 or 4;
Bivariate logistic regressions: 5.89[A];
Multivariate logistic regressions: 1.93.
Variable category: Amount requested: $100,000-999,999;
Bivariate logistic regressions: reference;
Multivariate logistic regressions: reference.
Variable category: Amount requested: $1,000,000-9,999,999;
Bivariate logistic regressions: 0.56;
Multivariate logistic regressions: 1.35.
Variable category: Amount requested: $10,000,000-49,999,999;
Bivariate logistic regressions: 0.26[A];
Multivariate logistic regressions: 0.37.
Variable category: Amount requested: $50,000,000 or more;
Bivariate logistic regressions: 0.86;
Multivariate logistic regressions: 0.79.
Variable category: Applications submitted by state and state group:
States with 1 to 3 applications;
Bivariate logistic regressions: 3.94[A];
Multivariate logistic regressions: 2.94.
Variable category: Applications submitted by state and state group:
States with 4 to 9 applications;
Bivariate logistic regressions: 1.14;
Multivariate logistic regressions: 0.88.
Variable category: Applications submitted by state and state group:
Missouri;
Bivariate logistic regressions: 5.06[A];
Multivariate logistic regressions: 9.12[A].
Variable category: Applications submitted by state and state group:
Washington;
Bivariate logistic regressions: 0.08[A];
Multivariate logistic regressions: 0.07[A].
Variable category: Applications submitted by state and state group:
New York;
Bivariate logistic regressions: 0.38;
Multivariate logistic regressions: 0.37.
Variable category: Applications submitted by state and state group:
California;
Bivariate logistic regressions: reference;
Multivariate logistic regressions: reference.
Source: GAO analysis of FRA data.
[A] Ratios which are significant at P < 0.05.
[End of table]
The multivariate model estimates the net effects of these different
variables on the likelihood of applications being selected for
funding, or the effects of each variable when the effects of other
variables are considered simultaneously, rather than one at a time.
Our results indicate that the differences between tracks and amount
requested categories are rendered insignificant when technical review
scores and state and state group are taken into account, while the
effect of technical review score and the differences between state and
state group remain sizable and in most cases significant.
Specifically, we found that, when we accounted for all four variables,
applications receiving a technical review score of 3, 4, or 5 were
about seven to eight times more likely to be selected for funding than
applications which scored 1 or 2. In addition, applications from
states that submitted one to three applications, and applications from
Missouri, were three and nine times as likely, respectively, to be
selected as those from California, while those from Washington state
were less than one-tenth as likely as those from California to be
selected. The remaining variable categories were not significant in
the multivariate model and, therefore, do not provide a statistical
explanation for why applications were more or less likely to be
selected for an award.
[End of section]
Footnotes:
[1] Pub. L. No. 111-5, 123 Stat. 115 (Feb. 17, 2009).
[2] On December 9, 2010, the department redirected $1.195 billion in
intercity passenger rail funds originally designated for Ohio and
Wisconsin to 13 other states, which were selected for Recovery Act
awards in January 2010. At the time of this announcement, our audit
work was substantially complete and, therefore, we did not assess
FRA's approach to making these funding decisions.
[3] GAO, High Speed Rail: Learning From Start-ups, Prospects for
Increased Industry Investment, and Federal Oversight Plans,
[hyperlink, http://www.gao.gov/products/GAO-10-625] (Washington, D.C.:
June 17, 2010).
[4] On October 28, 2010, the department announced 54 additional awards
totaling $2.4 billion. These awards will be funded through the
department's annual appropriation for fiscal years 2009 and 2010,
which remain available until expended. The department also requested
$1 billion for intercity passenger rail in fiscal year 2011.
[5] We did not assess whether the selected applications will achieve
benefits and costs stated in the applications submitted to FRA. We
have reported that applicants for major infrastructure projects, such
as high speed rail projects, often overstate benefits, such as the
number of likely riders. See GAO, High Speed Passenger Rail: Future
Development Will Depend on Addressing Financial and Other Challenges
and Establishing a Clear Federal Role, [hyperlink,
http://www.gao.gov/products/GAO-09-317] (Washington, D.C.: Mar. 19,
2009).
[6] At this time FRA also used the same approach to assess
applications for planning grants using up to $9.54 million in fiscal
year 2008 and 2009 funds (called "track 3") and for final design and
construction projects using at least $82.3 million of fiscal year 2008
and 2009 funds (called "track 4"). Application for tracks 3 and 4 were
assessed by the same technical review panels and at the same time as
the track 1a and 1b applications. Unless otherwise noted, this report
deals with only track 1a, 1b, and 2 applications.
[7] Pub. L. No. 110-432, 122 Stat. 4848 (Oct. 16, 2008).
[8] FRA, Preliminary National Rail Plan (Washington, D.C., October
2009) and FRA, National Rail Plan-Moving Forward: A Progress Report
(Washington, D.C., September 2010).
[9] By comparison, the fiscal years 2008 and 2009 appropriations for
the department included $30 million and $90 million, respectively, for
intercity passenger rail grants to states.
[10] An obligation is a commitment that creates a legal liability of
the government for the payment of goods or services ordered or
received.
[11] Department of Transportation, Vision for High-Speed Rail in
America (Washington, D.C., April 2009).
[12] 1274 Fed. Reg. 29900 (June 23, 2009).
[13] Only states, groups of states, interstate compacts, public
agencies, and Amtrak were eligible to apply for funding. Amtrak did
not independently submit any applications, but was included in a
number of other applications as the anticipated service operator.
[14] The number of applications and amount of requested funds
submitted by applicants includes several duplicate projects. For
example, Washington state submitted three track 2 applications in
which 11 of the same projects were contained in each application. In
tallying the number of applications and amounts requested, we did not
double count duplicate applications.
[15] Some of the criteria for the eligibility, technical, and
selection reviews were derived from requirements in PRIIA. For
example, PRIIA directed FRA to select projects that encourage
intermodal connectivity, which is covered under the technical review
criteria of transportation benefits. In addition, according to an FRA
official, the technical review criteria were based on the Recovery Act
and the department's general goals for transportation projects
identified in the funding announcement (e.g. developing livable
communities and encouraging environmental benefits).
[16] Final application scores were derived from individual panelists'
scores for each technical review criterion, which were weighted based
on the track under which they were submitted. For example, track 1
application scores were weighted to emphasize the reviewers' technical
review scores for transportation benefits, economic recovery benefits,
and project management approach, and place less weight on the scores
for other public benefits. In contrast, track 2 application scores
were weighted to emphasize the scores for transportation benefits and
other public benefits.
[17] Standardized scores, called z-scores, were applied only to tracks
1a, 1b, 3, and 4 technical review scores as an internal control to
ensure interrater reliability across the 12 review panels.
Standardization was not required for track 2 projects because the
technical review was conducted by a single panel.
[18] For a list of applications and the extent to which they made it
through eligibility determination, and selection see [hyperlink,
http://www.dot.govirecovery/docs/hsiprapplist.pdf].
[19] There were three instances in which the criteria in the funding
announcement did not completely align with the guidebooks. For
example, the funding announcement includes a technical review
criterion that projects create an integrated intercity passenger rail
network, including allowance for and support of future network
expansion. The guidebooks discuss the connection of the proposed
project to other intercity rail services, but do not indicate that
panelists should consider future network expansion. We viewed these
instances as minor and, therefore, concluded that the funding
announcement and technical review guidebooks generally align.
[20] GAO, Standards for Internal Control in the Federal Government,
[hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1]
(Washington, D.C.: November 1999).
[21] U.S. Department of Transportation, Financial Assistance Guidance
Manual (Washington, D.C., March 2009).
[22] These amounts include track 1 and 2 awards, and may change as FRA
finalizes awards.
[23] On October 28, 2010, FRA announced that Florida was selected for
an additional $808 million from the department's annual appropriations
for the Tampa to Orlando high speed rail project. In addition, on
December 9, 2010, FRA announced that it had redistributed an
additional $342.3 million to Florida originally designated for Ohio
and Wisconsin. On February 16, 2011, Florida announced that they will
turn down $2.4 billion in funding awarded for the Tampa to Orlando
high speed rail project. As of late February, FRA had not announced
how this funding would be used.
[24] On October 28, 2010, FRA announced that Washington state was
selected for an additional $31 million from department's annual
appropriations. In addition, on December 9, 2010, FRA announced that
it had redistributed an additional $161.5 million to Washington state
originally designated for Ohio and Wisconsin. We did not ask
Washington state officials how these additional funds will affect
their ability to complete the 16 proposed projects.
[25] Officials also noted that they were adjusting award amounts and
the scope of the projects as they negotiate cooperative agreements
with each state, which will serve as documentation of the final award
decisions.
[26] The statistical tests we ran were bivariate and multivariate
logistic regression models, which included the following factors: (1)
technical review scores, (2) number of applications submitted per
state, (3) application track, and (4) the amount of project funding
requested. The third and fourth factors were not statistically
significant and, therefore, do not provide a statistical explanation
for why projects were more or less likely to be selected for an award.
For more information on our methodology and additional analyses see
appendix IV.
[27] The federal agency guidance we examined came from the Departments
of Commerce, Education, Labor, and Transportation. For more
information on our methodology for developing recommended practices
for this review see appendix II.
[28] Race to the Top, which is part of the Recovery Act's State Fiscal
Stabilization Fund, is a competitive grant program which provides
funds to states to encourage educational reform that will result in
improved academic performance.
[29] The Recovery Act contains a number of provisions related to
transparency, notably the requirement that recipients of these funds
report quarterly on a number of things, such as the purpose and
expected outcomes of their awards and on jobs created. These reports
are available on the administration's Web site at [hyperlink,
http://www.recovery.gov]. See GAO, Recovery Act: Increasing the
Public's Understanding of What Funds Are Being Spent on and What
Outcomes Are Expected, [hyperlink,
http://www.gao.gov/products/GAO-10-581] (Washington, D.C.: May 27,
2010).
[30] For a list of programs we examined and more information on our
methodology for selecting these programs see appendix II.
[31] [hyperlink, http://www.gao.gov/products/GA0-10-625].
[32] FRA identified provisional amounts of funding to applicants,
subject to negotiation. Further, FRA did not specify funding amounts
for each project in its notification letters to applicants, providing
the flexibility for states to allocate funding across FRA-selected
applications. As a result, we were unable to determine the amount of
funding awarded for each category of high speed rail applications.
[33] Given that FRA was provided discretion to determine the number of
high speed rail applications to select during its funding competition,
we did not evaluate whether it selected an appropriate number of
projects for funding.
[34] In contrast, several other capital grants and investment programs
have relied on existing program structures, such as the department's
Highway Infrastructure Investment and Transit Capital Assistance
programs, and only authorized agencies to obligate funds through
September 30, 2010. The Highway Infrastructure Investment program,
administered by the Federal Highway Administration provides funding to
states for restoration, repair, and construction of highways among
other things. The Transit Capital Assistance program, administered by
the Federal Transit Administration, provides grants for facility
renovation or construction, vehicle replacements, preventive
maintenance, and other related activities.
[35] The states were Arizona, California, Florida, Iowa, Kansas,
Louisiana, New York, Oregon, Pennsylvania, and South Carolina.
[36] We selected Ohio and Washington because FRA proposed to provide
these states with $164 million and $386 million, respectively, less
than requested.
[37] To identify these practices, we reviewed prior work on
discretionary grants to compile an initial list of grants manuals from
a number of federal agencies. We then verified and added to this
listing through a separate search and review of government agency Web
sites. In addition, we consulted with GAO staff who have expertise on
federal discretionary grant practices. These practices reflect our
review of a judgmental sample of discretionary grant guidance and may
not include all recommended practices used by federal agencies.
[38] We typically reviewed information on each program's agency Web
site as part of our review of these three sources.
[39] Ohio is slated to receive $15 million for preliminary engineering
and environmental analysis work conducted on its track 2 project.
According to FRA, $30 million remains obligated to Wisconsin for costs
incurred on its track 2 project, and the state is scheduled to receive
$14 million for the two previously selected track 1a projects.
[40] The technical review scores were averaged and weighted based on
the priorities listed in the funding announcement.
[41] The inclusion of these additional data points slightly affected
the final technical review scores for other applications because FRA
used the average score across applications when it used a
standardization procedure, called a z-score, to correct for potential
differences in the ways applications were scored across track 1, 3,
and 4 panels.
[42] The bivariate models estimate differences in the odds on
selection across groups or categories of applications when the other
variables are ignored. The multivariate models estimate differences in
the odds on selection across categories of each variable when the
other variables are taken into account, or controlled statistically.
[43] For example, a category within the technical review score
variable might include applications receiving a score of 3, as in
table 11.
[44] We have omitted this expanded table to save space. The
differences across the 34 states that submitted an application are
statistically significant given the likelihood ratio chi-square
statistic calculated to test the independence of the state from which
the application was submitted and the likelihood of selection (L2 =
67.40 with 33 df, P < .01).
[45] When we grouped the states submitting lower number of
applications, two-thirds of the variability from the individual state
analysis was retained, and the variability lost as a result of the
grouping was statistically insignificant.
[End of section]
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